The Reserve Bank of India (RBI) has recently imposed fines on Punjab National Bank (PNB) and four other banks for regulatory non-compliance.
Reason Behind Punjab National Bank’s Fine
PNB was fined Rs 1.31 crore for not adhering to RBI guidelines on ‘Know Your Customer’ (KYC) norms and management of ‘Loans and Advances’.
The RBI conducted an assessment of PNB’s financial status as of March 31, 2022, uncovering irregularities.
Despite receiving notices and opportunities to explain, PNB’s responses were deemed insufficient by the RBI.
Specific Lapses by Punjab National Bank
According to the RBI, PNB granted loans to two government corporations using funds received from the government as subsidies, refunds, or reimbursements, contravening RBI directives.
Additionally, inadequate record-keeping regarding customer identities and addresses further contributed to the penalty.
Other Banks Penalized by RBI
Prior to PNB, the RBI imposed fines on four cooperative banks for similar compliance failures:
1) Gujarat State Employees Cooperative Bank, Gujarat
2) Rohika Central Co-operative Bank, Madhubani, Bihar
3) National Co-operative Bank, Mumbai, Maharashtra
4) Bank Employees Co-operative Bank, West Bengal
These actions by the RBI aim to enforce regulatory standards without directly impacting the customers of Punjab National Bank and the other penalized banks.
