RBI Penalty: On March 24, the Reserve Bank of India imposed a penalty of Rs. 30 lakh on Karur Vysya Bank for violating RBI rules. During a select scope inspection conducted by the central bank, it was discovered that the bank did not provide information about fraud accounts to the RBI, which is mandatory for all banks as per the 2016 instructions of the RBI. The inspection was carried out from February 21, 2022, to March 4, 2023, and a notice was issued to the bank asking for an explanation as to why action should not be taken against it. After the bank replied to the show cause notice, the RBI imposed the fine.
In a statement issued by the RBI, it was confirmed that the bank had violated the rules, and hence the penalty was imposed. It is noteworthy that Karur Vysya Bank had earned a profit of Rs. 289 crore in the December quarter, which is 30 percent more than the profit earned in the December quarter of the previous year.
Previously, the Reserve Bank had imposed a penalty of Rs. 2.27 crore on RBL Bank for not complying with certain guidelines related to loan recovery agents. The central bank had received several complaints against the bank, which led to this penalty.
Non-compliance with RBI rules and guidelines can lead to heavy penalties and fines. It is imperative for banks to abide by these rules to avoid such actions being taken against them.
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