RBI slaps fines on Bank of India & Bandhan Bank for breach of rules

MUMBAI — The Reserve Bank of India (RBI) has imposed fines on Bank of India and Bandhan Bank for breach of rules, the central bank said on Wednesday.

A penalty of INR 1,40,76,000 has been imposed on Bank of India for non-compliance with the following RBI directions:

(1) The bank did not pay interest in certain term deposit accounts as per the schedule of interest rates disclosed in advance;

(2) had levied SMS alert charges from customers based on invalid mobile numbers and not on actual usage basis;

(3) failed to reset interest rates in Marginal Cost of Funds based Lending Rate (MCLR) and external benchmark linked advances at prescribed periodicity;

(4) failed to benchmark the interest on certain floating rate retail loans and floating rate loans to MSME, to an external benchmark rate;

(5) failed to report or inaccurately reported data pertaining to certain large borrowers to Central Repository of Information on Large Credits (CRILC), and (6) failed to furnish accurate information to Credit Information Companies (CICs).

The RBI also imposed a penalty of INR 29.55 lakh on Bandhan Bank Ltd for not complying with its directions.

The RBI said that the penalties were based on supervisory findings of non-compliance with regulatory instructions/ statutory provisions after considering the replies given by the banks to the issues that were raised.

At the same time, the RBI said that the action against the two banks is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the banks with their customers.

Further, imposition of the monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.