RBI Penalises Multiple Banks and Companies for Violations of Banking Norms

The Reserve Bank of India (RBI) has recently imposed penalties on several banks and financial companies, including CSB Bank Ltd, Bank of Maharashtra, DCB Bank Ltd, IIFL Finance Ltd, and Navi Finserv Ltd, for violating banking norms, through official orders dated February 6, 2025.

Penalties imposed on banks are as follows:

CSB Bank Ltd

RBI, using its power under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949, imposed a penalty of Rs. 63.60 lakh on CSB Bank Ltd for non-compliance with certain directions issued by RBI on ‘Scope of activities to be undertaken of Business Correspondents (BCs)‘ and ‘Customer Services in Banks‘.

Bank of Maharashtra

RBI using its power under the provision of section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005 and section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949, imposed a penalty of Rs. 32.50 lakh on the Bank of Maharashtra for non-compliance with certain provisions of directions issued by RBI on ‘Credit Information reporting in respect of self-help group members’ and ‘Know Your Customer‘.

DCB Bank Ltd

RBI, using its power under the provisions of section 47(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949, imposed a penalty of Rs. 29.60 lakh on DCB Bank Ltd for non-compliance with certain directions issued by RBI on loans extended against the pledge of gold ornaments and jewellery for non-agricultural end uses.

Penalties imposed on companies are as follows:

IIFL Finance Ltd

RBI, using its power under section 58G(1)(b) read with section 58(5)(aa) of the Reserve Bank of India Act, 1934, imposed a penalty of Rs. 5.30 lakh on IIFL Finance Ltd for non-compliance with certain directions issued by RBI on ‘Asset Classification’.

Navi Finserv Ltd.

RBI, using its power under section 58G(1)(b) read with section 58(5)(aa) of the RBI Act, 1934, imposed a monetary penalty of Rs. 3.80 lakh on Navi Finserv Ltd. for non-compliance with certain directions issued by RBI on ‘Recovery Agents’.