RBI imposes penalty on five banks including PNB for regulatory non-compliance

New Delhi , 6 July 2024 :- The Reserve Bank of India (RBI) recently imposed penalties on five banks, including Punjab National Bank (PNB), for various non-compliances with its directions. According to The Economic Times, PNB was fined ₹1.31 crore on July 3, 2024, due to failures in adhering to guidelines related to ‘Loans and Advances: Statutory and Other Restrictions’ and ‘Reserve Bank of India (Know Your Customer (KYC) Direction, 2016′. This penalty resulted from the findings of the Statutory Inspection for Supervisory Evaluation (ISE 2022), which assessed PNB’s financial position as of March 31, 2022. The RBI’s decision followed a comprehensive process that included issuing a notice to PNB based on supervisory findings, advising the bank to show cause why a penalty should not be imposed, and then considering PNB’s reply and oral submissions during a personal hearing. Ultimately, the RBI found that the charges against PNB were substantiated, warranting the imposition of a monetary penalty.

In addition to PNB, the RBI penalized The Gujarat Rajya Karmachari Co-operative Bank in Gujarat, The Rohika Central Co-operative Bank in Madhubani, Bihar, The National Co-operative Bank in Mumbai, and The Bank Employees’ Co-operative Bank in West Bengal for various compliance failures. The penalties on these banks were also imposed under the provisions of the Banking Regulation Act, 1949, emphasizing the RBI’s commitment to enforcing regulatory compliance within the banking sector. This move underscores the central bank’s vigilance in maintaining the integrity of the financial system by ensuring that banks adhere strictly to established norms and regulations.