In a significant move to uphold regulatory compliance, the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹61.40 lakh on a prominent private sector bank for lapses in adhering to the central bank’s directives on Know Your Customer (KYC) norms.
The penalty, announced on November 19, 2024, was levied under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. This decision followed the Statutory Inspection for Supervisory Evaluation conducted by the RBI for the financial years ending March 31, 2022, and March 31, 2023.
The investigation uncovered two key violations:
- Failure to obtain prescribed Officially Valid Documents (OVD) while opening certain credit card accounts.
- Allocation of multiple Customer Identification Codes to certain customers, in violation of the requirement for a Unique Customer Identification Code (UCIC).
After reviewing the bank’s response to the show-cause notice and considering its oral submissions during the hearing, the RBI determined that the charges were substantiated, justifying the imposition of the monetary penalty.
The RBI clarified that this action pertains solely to deficiencies in regulatory compliance and does not question the validity of any transactions or agreements between the bank and its customers.
As the banking sector continues to face increased scrutiny, this penalty serves as a reminder of the critical importance of adhering to regulatory norms.
The penalized entity in this case is RBL Bank Limited.
