The Reserve Bank of India has imposed a monetary penalty of ₹63.60 lakh on Bank of Baroda. The RBI penalty on Bank of Baroda was ordered on June 30, 2026, citing violations of Fair Practices Code and KYC norms. This action follows a routine supervisory inspection conducted by the central bank.
Key Details of the RBI Penalty on Bank of Baroda
The RBI conducted a statutory Inspection for Supervisory Evaluation (ISE 2025) of Bank of Baroda. This inspection assessed the bank’s financial position as on March 31, 2025. As a result, the regulator identified serious compliance gaps and issued a show-cause notice to the bank.
The central bank found two specific charges sustained against the bank. First, Bank of Baroda collected interest at rates higher than the contracted rate in certain loan accounts. Additionally, the bank failed to upload KYC records of some customers to the Central KYC Records Registry (CKYCR) within the prescribed timeline.
However, the RBI also considered the bank’s written reply, additional submissions, and oral arguments during a personal hearing. After reviewing all evidence, the regulator confirmed the charges and imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
What This Means for Bank of Baroda Customers
The RBI has clarified that this action targets regulatory deficiencies only. Therefore, it does not question the validity of any transaction or agreement the bank has made with its customers. Customers need not worry about the legality of their existing accounts or loan contracts.
Meanwhile, the regulator has made clear that this penalty does not rule out further action. The RBI reserves the right to initiate additional proceedings against Bank of Baroda if warranted. For example, more supervisory steps could follow if compliance gaps remain unaddressed.
This penalty serves as a reminder to all lenders about strict adherence to KYC rules and fair lending practices. Banks must charge only the agreed rate of interest to borrowers. Additionally, timely KYC uploads to the CKYCR are a non-negotiable regulatory requirement.
Source: RBI Press Releases
