The country’s central bank, the Reserve Bank of India (RBI), on Monday imposed fines on five financial institutions. These institutions include public sector Union Bank of India, CSB Bank and Muthoot Housing Finance, which were fined. The Reserve Bank has imposed this fine due to violation of several regulatory norms. According to Bhasha news, RBI imposed a fine of Rs 1.86 crore on CSB Bank for not following some instructions related to guidelines related to risk management and code of conduct in outsourcing of financial services and master circular on branch authorization.
Action for not following the norms
According to the news, the central bank said in another statement that Union Bank of India has been fined Rs 1.06 crore for non-compliance of certain norms related to Know Your Customer (KYC) and other reasons. Muthoot Housing Finance Company has been fined Rs 5 lakh for non-compliance of certain provisions of the ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021’.
The fine is not related to the financial transaction
Apart from this, a fine of Rs 5 lakh has been imposed on Nido Home Finance Limited and Rs 3.1 lakh on Ashoka Investment Limited. RBI said that in each case the fine is based on deficiencies in regulatory compliance and is not related to the financial transactions of these units.
RBI has imposed heavy fines on many banks so far this year. Earlier this year, it has imposed fines on public sector Bank of India, private sector Bandhan Bank, IDFC First Bank and other institutions for not following regulatory norms. RBI also keeps reviewing cooperative banks from time to time. Many times it also cancels the license of the bank for violating the rules.
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