RBI Penalises Bandhan Bank, Bank Of India With Monetary Fine For Rule Violations

The Reserve Bank of India (RBI) has imposed monetary penalties on two banks and one non-banking finance company for violating rules. The banks that have incurred the penalty are Bandhan Bank and Bank of India, while the NBFC is Indostar Capital Finance.

As per the press release, Bank of India has been fined approximately Rs 1.41 crore (Rs 1,40,76,000) as it didn't pay interest on certain term deposit accounts, charged SMS alert fees from customers based on invalid mobile numbers instead of actual usage, and failed to reset interest rates in marginal cost of fund-based lending rate (MCLR) and external benchmark linked advances at prescribed intervals.

Bandhan Bank and Indostar Capital Finance have also been penalized with Rs 29.55 lakh and Rs 13.60 lakh respectively by the central bank for rule violations. The bank has been penalized for failing to comply with certain directions related to interest rates on deposits that were issued by the Reserve Bank of India. Additionally, the bank did not benchmark the interest rate on certain floating-rate retail loans and floating-rate loans to MSMEs to an external benchmark rate. Moreover, the bank also inaccurately reported data pertaining to certain large borrowers to CRILC and failed to furnish accurate information to Credit Information Companies (CICs).