RBI imposes Monetary Penalty of Rs.32 Lakh on Canara Bank for non-compliance with directions

The Reserve Bank of India (RBI) has imposed a Monetary Penalty of Rs.32.30 lakh on Canara Bank for non-compliance with certain directions issued.

The Monetary Penalty levied for non-compliance with certain directions issued by RBI on ‘Data Format for Furnishing of Credit Information to Credit Information Companies and other Regulatory Measures’, ‘Resolution Framework 2.0 – Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs)’ and ‘Resolution Framework – 2.0: Resolution of Covid-19 Related Stress of Individuals and Small Businesses’.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022.

The examination of the Risk Assessment Report/Inspection Report about ISE 2022, and all related correspondences in that regard, revealed, inter alia, non-compliance with the aforesaid directions by the bank, to the extent it (i) failed to correct the rejected data and upload the same with the Credit Information Companies (CICs) within 7 days of receipt of such rejection report from the CICs, and (ii) restructured certain accounts which were not standard assets as on March 31, 2021 under the extant directions.

Therefore, a notice was issued to the bank, urging it to show cause why a penalty should not be imposed for failing to comply with the aforementioned orders.

After evaluating the bank’s response to the notice and oral representations made during the personal hearing, the RBI concluded that the allegation of noncompliance with the aforementioned RBI directions was supported and warranted the imposition of a monetary penalty.

This penalty has been imposed in the exercise of powers vested in RBI under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949 and section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005.

This action is based on errors in regulatory compliance and is not intended to rule on the legality of any transaction or agreement entered into by the bank with its clients.