RBI Imposes Rs. 1.7 Crore Penalty on Bank of India & Bandhan Bank for Regulatory Infractions

The Reserve Bank of India ( RBI ) has imposed a collective monetary penalty of Rs. 1.7 crores on Bank of India and Bandhan Bank Limited for breaching regulatory guidelines. Bank of India faced a penalty of Rs. 1,40,76,000, while Bandhan Bank Limited was fined Rs. 29.55 lakhs.

For Bank of India, the RBI identified several instances of non-compliance with directives pertaining to ‘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 )’. Additionally, violations of the Credit Information Companies Rules, 2006 ( CIC Rules ), were noted.

According to RBI finding following shortcomings in the Bank of India :

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

Regarding Bandhan Bank Limited, the RBI highlighted instances of non-compliance with specific directives outlined in the ‘Reserve Bank of India ( Interest Rate on Deposits ) Directions, 2016’. This penalty has been enforced using the powers granted to the RBI as per the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act.

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