The Reserve Bank of India (RBI) has recently imposed monetary penalties on various financial institutions for failing to meet regulatory requirements. These actions highlight the RBI’s ongoing commitment to ensuring compliance and promoting transparency within India’s financial sector. Below are the key penalties and the reasons behind them.
PayMe India Financial Services Pvt. Ltd. Fined ₹2 Lakh for Non-Compliance
On June 3, 2025, the RBI imposed a ₹2 lakh penalty on PayMe India Financial Services Private Limited for violating the conditions of its Certificate of Registration (CoR) and non-compliance with the Master Direction for Non-Banking Financial Companies (NBFC).
What Went Wrong:
- The company accepted public deposits, which is against the terms of its registration.
- PayMe failed to obtain prior approval from RBI for a change in its shareholding exceeding 26%.
The penalty was imposed under Section 58G(1)(b) of the RBI Act due to these regulatory breaches.
Poornawadi Nagarik Sahakari Bank Maryadit Beed Faces ₹1 Lakh Penalty
Another penalty of ₹1 lakh was imposed on Poornawadi Nagarik Sahakari Bank Maryadit, Maharashtra, for failing to follow RBI guidelines on Management of Advances and Know Your Customer (KYC) procedures.
Reasons for the Penalty:
- The bank sanctioned gold loans that exceeded the prescribed Loan to Value (LTV) ratio.
- It did not upload KYC records for certain customers to the Central KYC Records Registry (CKYCR) within the required timeframe.
This penalty was levied in accordance with Section 47A(1)(c) of the Banking Regulation Act, 1949.
Ratanchand Shah Sahakari Bank Ltd. Fined ₹2 Lakh for Regulatory Failures
On May 30, 2025, Ratanchand Shah Sahakari Bank, located in Mangalwedha, Maharashtra, was penalized ₹2 lakh by RBI for Know Your Customer (KYC) violations and failure to comply with the Supervisory Action Framework (SAF).
Key Issues:
- The bank violated SAF guidelines by offering higher interest rates on deposits than State Bank of India.
- It breached the single borrower exposure limit for loans and advances.
- The bank assigned multiple customer identification codes (CICs) instead of a Unique Customer Identification Code (UCIC).
This penalty was imposed based on Section 47A(1)(c) of the Banking Regulation Act, 1949.
Adilabad District Co-operative Central Bank Ltd. Fined ₹1 Lakh
On June 4, 2025, The Adilabad District Co-operative Central Bank Ltd., Telangana, was imposed a ₹1 lakh penalty for breaching statutory provisions under the Banking Regulation Act, 1949.
Reasons for the Penalty:
- The bank sanctioned loans to its directors, in violation of Section 20 and Section 56 of the Banking Regulation Act.
This penalty is a result of Section 47A(1)(c) of the BR Act.
Conclusion: RBI’s Commitment to Upholding Financial Integrity
The RBI’s decision to impose these penalties emphasizes the importance of adhering to regulatory standards. Financial institutions must ensure they follow RBI’s directives to maintain transparency and accountability within the financial ecosystem. Failure to comply with these guidelines can result in severe penalties, and the RBI has made it clear that further action may be taken if needed.
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