RBI Imposes Monetary Penalty Of Rs 1.40 Crore On Bank Of India, Rs 29.55 Lakh On Bandhan Bank

Check the reasons why RBI has imposed monetary penalty on Bank of India and Bandhan Bank.

New Delhi: The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1,40,76,000 on Bank of India for non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’, ‘Customer Service in Banks’, ‘Interest Rate on Advances’, ‘Central Repository of Information on Large Credits (CRILC) - Revision in Reporting’, and ‘Membership of Credit Information Companies (CICs)’ and contravention of provisions of Credit lnformation Companies Rules, 2006 (ClC Rules). 

"This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (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," RBI added.

The Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2021 (ISE 2021) and March 31, 2022 (ISE 2022). 

RBI said that the bank did not pay interest in certain term deposit accounts as per the schedule of interest rates disclosed in advance. It had levied SMS alert charges from customers based on invalid mobile numbers and not on actual usage basis. BOI failed to reset interest rates in MCLR and external benchmark linked advances at prescribed periodicity and failed to benchmark the interest on certain floating rate retail loans and floating rate loans to MSME, to an external benchmark rate. Further, RBI said that BOI failed to report or inaccurately reported data pertaining to certain large borrowers to CRILC and  failed to furnish accurate information to Credit Information Companies (CICs).

The central bank has also imposed a monetary penalty of Rs 29.55 lakh  on Bandhan Bank Ltd for non-compliance with certain directions on ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’. 

"This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949," RBI said in a release. RBI said that it found inter alia that the charge pertaining to opening of savings deposit account of an ineligible entity was sustained.