The Reserve Bank of India (RBI) has intensified its scrutiny over banks, penalizing two more banks for regulatory breaches. This follows a recent penalty imposed on South Indian Bank. Banks in India are required to comply strictly with RBI guidelines to ensure transparent services for account holders, and any violation can lead to significant consequences.
Fines Imposed on Banks in West Bengal and Gujarat
- Bally Co-operative Bank Limited in Howrah, West Bengal was fined Rs 1 lakh for failing to meet specific regulatory requirements.
- The Satthamba People’s Co-operative Bank Limited in Aravalli, Gujarat was penalized Rs 50,000 for failing to update its customer KYC records.
Details of Violations
- West Bengal’s Bally Co-operative Bank: The bank did not deposit the required amount into the SIDBI refinance fund within the stipulated period, failing to meet the Priority Credit Lending (PCL) target for FY 2022–23. Despite a warning, this shortcoming led to the RBI’s decision to impose a monetary penalty.
- Gujarat’s Satthamba People’s Co-operative Bank: This bank failed to implement a system for periodic KYC updates for customers and neglected the six-month review requirement for risk classification of accounts.
Impact on Customers
The RBI clarified that these actions are based solely on regulatory compliance deficiencies and are not intended to impact customer transactions or agreements. The fines are focused on ensuring that banks adhere strictly to regulatory standards, safeguarding banking integrity without directly affecting account holders.
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