RBI imposed Monetary Penalty on RBL Bank Limited

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.61.40 lakh on RBL Bank Limited for non-compliance with certain directions issued by RBI on ‘Know Your Customer’.

This penalty was levied in exercise of the RBI’s powers under Section 47A(1)(c) and Section 46(4)(i) of the Banking Regulation Act of 1949.

The RBI performed a Statutory Inspection for Supervisory Evaluation of the bank based on its financial situation as of March 31, 2022 and March 31, 2023. Based on supervisory findings of noncompliance with RBI instructions and accompanying correspondence, a notice was sent to the bank, directing it to show cause why a penalty should not be imposed for its failure to comply with the abovementioned RBI directions.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:

• The bank did not get a prescribed Officially Valid Document (OVD) when opening certain credit card accounts.
• Instead of assigning each client a unique client Identification Code (UCIC), they were given numerous Customer Identification Codes.

The action is based on shortcomings in statutory and regulatory compliance and is not intended to rule on the legality of any transaction or arrangement entered into by the bank with its clients. Furthermore, the issue of a monetary penalty does not preclude the RBI from taking any further action against the bank.