The Reserve Bank of India (RBI) has imposed penalties on three public sector banks – Union Bank, Bank of India and Central Bank of India.
RBI imposed penalty on Union Bank
The Reserve Bank of India (RBI) has imposed a penalty of ₹95.40 lakh on Union Bank of India. The penalty was imposed because the bank did not follow RBI rules related to limiting customer liability in unauthorised electronic transactions and automation of asset classification processes.
After reviewing the bank’s reply and hearing its explanation, RBI found the following issues:
- The bank did not credit money to customers’ accounts within 10 working days after unauthorised transactions were reported.
- The bank did not provide 24×7 facilities for customers to report unauthorised transactions.
- The bank used manual intervention in system-based asset classification for some KCC accounts.
RBI imposed penalty on Bank of India
RBI has also imposed a penalty of ₹58.50 lakh on Bank of India for not following rules related to Priority Sector Lending and interest on deposits. After inspection and review, RBI found the following issues:
- The bank charged extra fees (such as processing and inspection charges) on small priority sector loans up to ₹25,000.
- The bank did not pay interest on some term deposits after their maturity until repayment.
RBI imposed penalty on Central Bank
RBI has imposed a penalty of ₹63.60 lakh on Central Bank of India for not following rules related to KYC and basic savings accounts. After inspection, RBI found:
- The bank did not upload KYC details of some customers to the Central KYC Registry on time.
- The bank opened multiple basic savings accounts for customers who already had such accounts.
RBI also imposed penalty on Pine Labs
RBI has also imposed a penalty of ₹3.10 lakh on Pine Labs Limited for not following rules related to prepaid payment instruments (PPIs). After inspection, RBI found that:
- The company issued Full-KYC prepaid payment instruments without properly completing KYC verification of customers.
