RBI fines PNB, Federal Bank for regulatory norms non-compliance

The Reserve Bank on Friday said it has imposed a Rs 72 lakh penalty on state-owned Punjab National Bank and a Rs 30 lakh penalty on private sector lender Federal Bank for non-compliance of certain regulatory norms. The central bank also imposed a fine of Rs 10 lakh on Mercedes-Benz Financial Services India Private Ltd for non-compliance of KYC norms.

The penalty on Punjab National Bank has been imposed for non-compliance with certain provisions related to ‘interest rate on advances’ and ‘customer service in banks’, RBI said in a release.
The private sector lender Federal Bank has been penalised for violation of KYC norms, the central bank said in another release.

The RBI also said a monetary penalty of Rs 13.38 lakh has been imposed on Kosamattam Finance Ltd, Kottayam, for non-compliance with certain provisions of the ‘Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’.

In all cases, the central bank said penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.

Last week RBI had penalised ICICI Bank Kotak Mahindra Bank for flouting certain guidelines. ICICI bank was penalised about Rs 13 crore. The bank had lent to a company in which two of the bank’s directors were on the board of the company.

The RBI also imposed a monetary penalty of ₹3.95 crore on Kotak Mahindra Bank (KMB) for failing to carry out the annual review and due diligence of the service provider and failing to ensure that customers are not contacted after 7 p.m. and before 7 a.m