Banks are under the observation of the Reserve Bank of India (RBI). We already know about the South Indian Bank; they have to pay a hefty penalty for breaching the rule. Now the RBI has taken action against two more banks. Every bank in India have to maintain the banking rules to provide clean and clear service to their account holders. Any type of breaching rules can cause trouble for banks.
A fine of Rs 1 lakh has been imposed on Bally Co-operative Bank Limited, Howrah, West Bengal, for violating rules. A penalty of Rs 50,000 has been imposed on The Satthamba People’s Co-operative Bank Limited Aravalli of Gujarat.
1.10 lakh penalty imposed on this bank of West Bengal (RBI Monetary Penalty)
Balli Co-operative Bank Limited failed to deposit the stipulated amount in the refinance fund kept with SIDBI within the stipulated time against the shortfall in achievement of the PCL target for FY 2022–23 and even after the issuance of a warning letter. After the allegations were proved during the investigation, the central bank decided to impose a monetary penalty.
KYC rule violation
Gujarat’s Sathamba People’s Co-operative Bank Ltd. failed to set up a system to periodically update the KYC of its customers. It also did not undertake a periodic review of risk classification of accounts at least once in 6 months.
Effect on customers?
This was revealed during the statutory inspection. After which notices were issued to the banks. This action will not affect the customers. “This action is based on deficiencies in regulatory compliance,” the RBI said. This purpose is not to affect the transaction or agreement taking place between the customer and the bank.”