India’s central bank on Friday said that it has imposed penalties on three banks and two NBFCs, including CSB Bank, Bank of Maharashtra, DCB Bank, IIFL Finance, and Navi Finserv.
| Entity | Penalty amount (in lakh Rs) |
| CSB | 63.60 |
| Bank of Maharashtra | 32.50 |
| DCB | 29.60 |
| IIFL | 5.30 |
| Navi Finserv | 3.80 |
A monetary penalty of Rs 63.60 lakh has been imposed on Thrissur based private lender CSB Bank Limited for non-compliance with directions issued by RBI on ‘Scope of activities to be undertaken of Business Correspondents (BCs)’ and ‘Customer Service in Banks’. The lender failed to classify certain accounts as ‘non-performing assets’ on restructuring.
Pune based state owned lender Bank of Maharashtra has been charged with a penalty of Rs 32.50 lakh for non-compliance with directions on ‘Credit information reporting in respect of Self Help Group members’ and ‘Know Your Customer’. The charges were:
i) The bank did not report Self Help Group member level data to Credit Information Companies; and
ii) The bank did not identify Beneficial Owners in certain accounts
The regulator imposed a penalty of Rs 29.60 lakh on another private lender DCB Bank Limited for non-compliance with directions issued by RBI on loans extended against pledge of gold ornaments and jewellery for non-agricultural end uses. The bank failed to maintain the prescribed loan-to-value (LTV) ratio in certain nonagricultural gold loan accounts during the tenure of such loans.
The RBI imposed a penalty of Rs 5.30 lakh on IIFL Finance Limited for non-compliance with directions issued by RBI on ‘Asset Classification’. The charges were:
i) The bank entered into an arrangement with BCs for undertaking activities, which are not covered within the scope of activities that can be undertaken by BCs; and
ii) The bank levied charges in certain savings bank accounts without ensuring that customers were made aware of such charges upfront.
A Rs 3.80 lakh penalty has been imposed on Navi Finserv Limited for non-compliance with provisions of the directions issued by RBI on ‘Recovery Agents’. The charge is that the company contacted customers after 7:00 p.m. and before 8:00 a.m. for recovery of overdue loans and did not follow the due protocol while sending messages to customers.
