RBI imposes monetary penalty on Canara Bank, Bank of India, J&K Bank; here's why

The Reserve Bank of India (RBI) announced on Friday, January 24, 2025, that it has imposed a monetary penalty on Jammu and Kashmir (J&K) Bank, Bank of India, and Canara Bank for deficiencies in certain regulatory compliances.

According to the RBI, J&K Bank has been penalised ₹3.31 crore for contravening certain norms related to financial inclusion: ‘Access to banking Services—Basic Savings Bank Deposit Account (BSBDA)’, ‘Know Your Customer’, and ‘Loans and Advances—Statutory and Other Restrictions’.

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RBI imposes penalty on banks for non-compliance

In another official statement, the RBI said a monetary penalty worth ₹1 crore was imposed on the public sector bank (PSB) Bank of India for non-compliance with certain provisions of the Banking Regulation Act of 1949. 

Also, the PSB Canara Bank was penalized ₹1.63 crore for non-compliance with certain directions on priority sector lending, the interest rate on deposits, and financial inclusion—access to banking services—BSBDA.

Additionally, the RBI imposed a penalty of ₹1 lakh on Datson Exports, West Bengal, for non-compliance with certain directions issued by the central bank on ‘Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs’. The RBI said the penalties were based on certain statutory and regulatory compliance deficiencies in each case. 

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The central bank added that the penalties were not intended to be pronounced upon the validity of any transaction or agreement entered into by the entities with their customers. This means that the customer service of the four banks will continue as usual despite the development.

Meanwhile, the RBI also said today that the ombudsman disposed of 95.1 per cent of the complaints it received between April 1, 2023 and March 31, 2024.

The Annual Report of the Ombudsman Scheme for the period April 1, 2023, to March 31, 2024, said that the Office of RBI Ombudsman (ORBIO) and the Centralised Receipt and Processing Centre received 9,34,355 complaints under the Reserve Bank—Integrated Ombudsman Scheme. 

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