RBI has also imposed a fine of Rs 2.1 lakh on Cent Bank Home Finance Limited for non-compliance with the provisions of Know Your Customer (KYC) guidelines.
The country’s central bank, the Reserve Bank of India, on Friday informed that it has imposed a fine of Rs 2.68 crore (₹2,68,30,000) on UCO Bank for violation of certain provisions including opening of current account, interest rate on deposits and fraud classification. According to PTI news, RBI has also imposed a fine of Rs 2.1 lakh on Cent Bank Home Finance Limited for non-compliance with the provisions of Know Your Customer (KYC) guidelines.
What does RBI have to say in both the cases
According to the news, in both the cases, the Reserve Bank of India has said that the fine is based on regulatory compliance and is not intended to pronounce judgement on the validity of any transaction or agreement entered into by the entities with their customers. Statutory inspection (ISE 2022) was conducted by RBI for supervisory evaluation of the bank with reference to its financial position as on March 31, 2022.
Based on the supervisory findings of violation of BR Act/non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why maximum penalty should not be imposed on it for failure to comply with the provisions of BR Act and RBI directions.
Reasons for penalty cited
RBI said the bank failed to benchmark floating rate personal/retail loans and loans to MSMEs as per external benchmarks. The bank opened certain current accounts of non-constituent borrowers having exposure to the banking system of Rs 5 crore or more. Also, certain savings deposit accounts were opened in the name of ineligible entities. Further, it failed to transfer the unclaimed balances in certain term deposits, which remained unclaimed for a period of more than ten years, to the Depositor Education and Awareness Fund within a period of three months from the expiry of the said period of ten years and failed to report certain cases of fraud to law enforcement agencies.
Related Articles-
What is RBI ULI: Know what is RBI’s new ULI plan, how will it work?
FasTag New Rules:! RBI has introduced new Fastag rule for all banks, check details
