| Summary points Bank of Baroda was fined Rs 63.6 lakh for violations of fair lending practices and KYC norms. The lender was found to have charged excess interest in certain loan accounts and delayed uploading customer records to the CKYCR. GIC Housing Finance was penalised Rs 3.1 lakh for non-compliance with the RBI’s KYC directions. The RBI clarified that the penalties pertain to regulatory lapses and do not affect the validity of customer transactions or agreements. |
The Reserve Bank of India (RBI) has imposed penalties totalling Rs 66.7 lakh on Bank of Baroda and GIC Housing Finance for non-compliance with regulatory norms relating to fair lending practices and know your customer (KYC) requirements.
The central bank levied a penalty of Rs 63.6 lakh on state-owned lender Bank of Baroda for violating provisions of the ‘Fair Practices Code for Lenders‘ and KYC regulations, while GIC Housing Finance was fined Rs 3.1 lakh for deficiencies related to compliance with KYC guidelines.
The RBI clarified that the penalties were imposed for deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.
After statutory inspection
According to the RBI, the penalty on Bank of Baroda followed a statutory inspection conducted for supervisory evaluation of the bank’s financial position as on March 31, 2025. Based on the findings of the inspection, the central bank issued a notice to the lender seeking an explanation for the observed lapses.
After considering the bank’s response and additional submissions, the RBI found that Bank of Baroda had charged interest higher than the contracted rate in certain loan accounts. The bank was also found to have failed to upload the KYC records of certain customers to the Central KYC Records Registry (CKYCR) within the prescribed timelines.
In a separate action, the RBI imposed a penalty of Rs 3.1 lakh on GIC Housing Finance for non-compliance with certain provisions of the central bank’s KYC directions.
The penalty followed a statutory inspection conducted by the National Housing Bank (NHB) with reference to the housing finance company’s financial position as on March 31, 2025. The RBI said that after examining the findings of the inspection and the company’s response to the notice issued, it concluded that the charge of non-compliance was sustained, warranting the imposition of the monetary penalty.
