RBI Imposes Penalties on Bandhan Bank, Muthoot Housing Finance Company

Reserve Bank Imposes Penalties on Bandhan Bank and Muthoot Housing Finance Company

The Reserve Bank of India (RBI) has taken disciplinary action against two financial institutions for non-compliance with regulatory norms. On Friday, the RBI announced that it has imposed a penalty of Rs 41.8 lakh on Bandhan Bank for failing to adhere to certain directions, including those related to Know Your Customer (KYC).

As per the RBI's findings, Bandhan Bank failed to conduct periodic reviews of risk categorization for specific account categories and sanctioned director-related loans without proper authorization. The penalty is a direct result of these regulatory deficiencies. It is essential to note that the RBI's action is solely focused on enforcing compliance with statutory and regulatory requirements and does not imply any judgment on the validity of transactions or agreements between the bank and its customers.

In a separate development, the RBI has imposed a penalty of Rs 80,000 on Muthoot Housing Finance Company for non-compliance with the RBI's directions on 'Fair Practice Code'. The central bank cited deficiencies in regulatory compliance as the reason for the penalty. Like the Bandhan Bank case, this penalty is also intended to enforce compliance with regulatory requirements and does not imply any judgment on the validity of transactions or agreements between the company and its customers.

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Comparison of Penalties

Note: The penalty amounts are exact as per the RBI's announcement.