RBI Issues Circular On Levying Unfair Interest Charges On Customers

The Reserve Bank on Monday imposed penalties on State Bank of India, Indian Bank and Punjab and Sind Bank for violation of a few regulatory norms. A penalty of Rs 1.3 crore has been imposed on the State Bank of India for non-compliance with certain directions issued by the RBI on ‘Loans and Advances – Statutory and Other Restrictions’ and ‘Guidelines on Management of Intra-Group Transactions and Exposures’, it said in a statement.

In another release, the RBI said a penalty of Rs 1.62 crore has been imposed on Indian Bank for contravention of certain directions on ‘Loans and Advances – Statutory and Other Restrictions’, KYC, and ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’.

A penalty of Rs 1 crore on Punjab & Sind Bank was slapped for non-compliance with certain provisions of the depositor education and awareness fund scheme.

The RBI has also imposed a penalty of Rs 8.80 lakh on Fedbank Financial Services Limited for non-compliance with certain provisions of the directions on monitoring fraud in NBFCs.

The RBI, however, added that the penalties on the banks and the NBFC are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.

(With inputs from agencies)