RBI Imposes Penalties on Bank of India, Bandhan Bank, and Indostar Capital Finance Ltd

The Reserve Bank of India (RBI) has taken action against Bank of India and Bandhan Bank for not following certain rules, as well as against Indostar Capital Finance Ltd for not complying with fraud monitoring guidelines.

A penalty of Rs 1.4 crore has been placed on Bank of India for not following RBI’s instructions about interest rates on deposits, customer service, and advances, and for breaking rules of Credit information Companies. RBI checked the bank’s financial situation as of March 31, 2021, and March 31, 2022.

Bandhan Bank has been fined Rs 29.55 lakh for not following specific directions from RBI. Similarly, Indostar Capital Finance Ltd has to pay a penalty of Rs 13.60 lakh for not following fraud monitoring rules and certain Know Your Customer (KYC) guidelines.

RBI clarified that these penalties are for not meeting regulatory standards and don’t question the legality of any deals between the banks and their customers.

It’s essential for banks and financial institutions to follow RBI’s guidelines to ensure the safety and security of customers’ money and maintain the integrity of the financial system. This action by RBI aims to encourage compliance and adherence to regulatory norms in the banking sector.