RBI Action: The Reserve Bank of India (RBI) has taken severe action against three public sector banks. They have received a significant monetary penalty for failing to follow the rules. These banks are located in Karnataka, Tamil Nadu, and Bihar, respectively. A penalty has also been levied on Glomor Finance Private Limited, a company based in Odisha. On November 20, the central bank issued a press statement announcing this.
Navada Central Co-operative Bank Limited, Bihar, has been fined Rs 1.50 lakh. Sri Basheshwar Sahakari Bank Niyamitha Bagalkot Karnataka has been fined one lakh rupees, while The Big Kanchipuram Co-operative Town Bank Limited has been fined 50,000 rupees.
On March 31, 2024, NABARD and the RBI conducted examinations of banks to assess their financial soundness. This inspection indicated that the banks were not following certain standards provided by the RBI. Based on the inspection findings, letters were sent to these banks, asking them to explain why they should not be punished for violating the rules. A personal hearing was then held. Based on the banks’ answers and oral presentations, the claims were proven true. Consequently, the RBI decided to apply penalties.
What exactly is the reason? (RBI Action 2025).
The Navada Central Co-operative Bank Limited did not contribute eligible unclaimed funds to the Depositors’ Education and Awareness Fund. It also failed to provide credit information for its consumers to credit reporting agencies.
Sri Bhashwara Sahakari Bank Niyamitha failed to categorize certain loan accounts as non-performing assets in accordance with the Income Recognition Asset Classification and Provisioning guidelines. It also failed to open some savings bank accounts in the names of ineligible companies.
The Big Kanchipuram Co-operative Town Bank Limited failed to submit its customers’ KYC records to the Central KYC Records Registry within the deadline specified.
Glomor Finance Private Limited broke these rules.
The company failed to get prior written clearance from the RBI to make management changes. This resulted in the replacement of more than 30% of its directors, excluding independents. The RBI levied a punishment of ₹4 lakh after investigating the charges. The central bank further stressed that this move will have no impact on the legitimacy of any transaction or agreement between the bank and the client.
