The Reserve Bank of India (RBI) on July 8 penalised Bank of India and Federal Bank for non-compliance of regulatory norms.
The banking regulator imposed a monetary penalty of Rs 70 lakh on the state-run Bank of India for failing to comply with Know Your Customer (KYC) norms, the RBI said in a release.
The bank did not allot Unique Customer Identification Code to a large number of customers and failed to complete the process even when timelines were extended.
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A penalty of Rs 5.72 crore was slapped on Federal Bank as the private lender failed to ensure that no incentive, cash or non-cash, was paid to its staff engaged in insurance broking or corporate agency services by “the insurance company”, the banking regulator said in a separate release. The release didn’t say which insurance company.
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The RBI also imposed a penalty of Rs 7.06 lakh on Gurugram-based Dhani Loans and Services due to the company’s failure to ensure categorisation of customers based on risk assessment and risk perception, a third release said.
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All three actions were based on deficiencies in regulatory compliance and were not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, said the RBI.
The central bank has stepped up the scrutiny of regulated entities to ensure compliance with corporate governance norms.
It had on July 4 fined private lenders Kotak Mahindra Bank and IndusInd Bank for failing to adhere to loan and KYC directives.
