CURRENT AFFAIRS : BANKING & FINANCE
RBI imposes monetary penalty on PNB, Federal Bank, and 2 other entities
- The Reserve Bank of India (RBI) has imposed monetary penalties on several financial institutions, including Punjab National Bank, Federal Bank, Mercedes-Benz Financial Services India Private Ltd, and Kosamattam Finance Ltd, for non-compliance with specific regulatory norms.
- These penalties are aimed at enforcing regulatory compliance within the financial sector.
Penalty Amounts & Reasons :
- Punjab National Bank: Rs 72 lakh penalty for non-compliance related to ‘interest rate on advances’ and ‘customer service in banks.’
- Federal Bank: Rs 30 lakh penalty for contravention of certain provisions of Know Your Customer (KYC) norms.
- Mercedes-Benz Financial Services India Private Ltd: Rs 10 lakh penalty for non-compliance with KYC provisions.
- Kosamattam Finance Ltd: Rs 13.38 lakh penalty for non-compliance with provisions of ‘Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.’
- Basis for Penalties: The penalties have been imposed due to deficiencies in regulatory compliance. It’s important to note that these penalties do not pass judgement on the validity of specific transactions or agreements entered into by these financial entities with their customers.
- Punishment for Non-Compliance: The RBI, as the regulatory authority, uses monetary penalties as a means to encourage financial institutions to adhere to established regulations and guidelines. Non-compliance with these norms can result in financial penalties, as seen in these cases.
