Reserve Bank of India (RBI) levies penalties totalling Rs 1.35 crore on three banks and two NBFCs

Key facts

• Reserve Bank of India (RBI) imposed penalties totalling Rs 1.35 crore on CSB Bank (Rs 63.60 lakh), Bank of Maharashtra (Rs 32.50 lakh), DCB Bank (Rs 29.60 lakh), IIFL Finance (Rs 5.30 lakh) and Navi Finserv (Rs 3.80 lakh).
• CSB Bank was penalised for non-compliance with directions on ‘Scope of activities to be undertaken of Business Correspondents (BCs)’ and ‘Customer Service in Banks’ and for failure to classify certain accounts as non-performing assets on restructuring.
• Bank of Maharashtra was penalised for non-compliance with directions on ‘Credit information reporting in respect of Self Help Group members’ and ‘Know Your Customer’, including not reporting Self Help Group member level data to Credit Information Companies and not identifying Beneficial Owners in certain accounts.
• DCB Bank was penalised for non-compliance with directions on loans against pledge of gold ornaments and jewellery for non-agricultural end uses by failing to maintain the prescribed loan-to-value ratio in certain non-agricultural gold loan accounts.
• IIFL Finance was penalised for non-compliance with directions on ‘Asset Classification’ by entering into an arrangement with BCs for activities outside the permitted scope and levying charges in savings bank accounts without ensuring prior customer awareness.
• Navi Finserv was penalised for non-compliance with directions on ‘Recovery Agents’ by contacting customers after 7:00 p.m. and before 8:00 a.m. for recovery of overdue loans and not following due protocol while sending messages to customers.