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RBI imposes ₹1.12 cr penalty on Bank of Maha

By Priyanka Verma 
Updated Date

Maharashtra: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.12 crore on the government-owned Bank of Maharashtra for non-compliance with certain directions issued by the central bank, including those related to Know Your Customer (KYC) norms.

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The Statutory Inspection for Supervisory Evaluation (ISE) of the public sector bank was conducted with reference to its financial position as on March 31, 2020, it said in a release on Monday.

The Bank of Maharashtra received the penalty for non-compliance with certain directions issued by the central bank including those related to Know Your Customer (KYC) norms, ‘creation of a Central Repository of Large Common Exposures – Across Banks’ and ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, and ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’.

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2020.

Scrutinies were conducted in the matter of non-credit of customs duty to the Government Account by the bank.

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The examination of the Risk Assessment Report and Inspection Report pertaining to the ISE, scrutiny reports and all the correspondence related to the same, revealed, inter-alia, non-compliance with the aforesaid directions issued by RBI to the extent the bank (i) failed to allot Unique Customer Identification Codes (UCIC) to its individual customers, (ii) failed to ensure integrity and quality of data submitted to RBI in CRILC, and (iii) did not enter into any Service Level Agreement (SLA) and failed to review the outsourcing arrangement for one of the outsourced financial services.

This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI further said.

Separately, the central bank also imposed a penalty of ₹12 lakh on Rajkot Nagarik Sahakari Bank, Rajkot for non-compliance with the direction on Interest Rate on Deposits’ and a penalty of ₹25 lakh on The Haryana State Co-operative Apex Bank, Chandigarh for contraventions with RBI directions on housing finance.

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