RBI Action: Private sector Karnataka Bank was not following many guidelines of RBI. Due to this, action has been taken against him.
RBI Action: Reserve Bank of India (RBI) has taken major action against private sector Karnataka Bank. According to the central bank, Karnataka Bank was violating many rules. Due to this, a fine of more than Rs 59 lakh has been imposed on this private sector bank.
Karnataka Bank will have to pay more than Rs 59 lakh
According to the information given by RBI, this penalty has been imposed on May 14, 2024. Karnataka Bank Limited has been ordered to pay Rs 59,10,000. According to the central bank, this bank was not properly following the guidelines related to interest rate and asset classification and advance on deposits. RBI has taken action against Karnataka Bank under the Banking Regulation Act, 1949.
Accounts were opened in the name of many ineligible companies
The central bank had started the investigation based on the financial results of Karnataka Bank as of March 31, 2022. It was revealed that the bank was not following many instructions properly. After this, a show cause notice was issued to the bank by RBI. In this, clarification was sought from the bank. After analyzing the reply received from the bank in response to this notice, the decision to impose fine was taken. The bank had opened accounts in the names of many ineligible companies. Also, he was not able to renew and review some loan accounts within the stipulated time limit. Nor had the bank declared them as non-performing assets (NPA).
RBI’s decision will not affect customers
RBI said that this action against Karnataka Bank will not affect the customers. Karnataka Bank is a private bank based in Mangaluru. It has 915 branches, 1188 ATMs and about 1.1 crore customers in 22 states and 2 union territories. The bank’s shares are listed on NSE and BSE.
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