RBI Fines Indian Bank and Mahindra Finance
Why in the news
The central bank announced monetary penalties on a public sector bank and an NBFC for breaching lending and disclosure norms.
| Entity | Penalty | Lapses |
|---|---|---|
| Indian Bank | ₹1.61 crore | Wrong benchmarking of rates on some floating-rate retail and MSME loans; collateral taken on small-value Kisan Credit Card loans |
| Mahindra & Mahindra Financial Services | ₹71.3 lakh | Fees and charges not disclosed to some customers; vehicles auctioned without prior opportunity to repay |
Key facts
- Indian Bank: ₹1.61 crore, including KCC collateral breach.
- Mahindra & Mahindra Financial Services: ₹71.3 lakh, a non-bank lender.
- Regulator in both cases: Reserve Bank of India.
Significance
- Shows RBI’s push for transparent loan pricing.
- Stresses fair treatment of borrowers.
- Insists on strict compliance in both banking and NBFC segments.
Exam angle
- KCC: taking collateral on small-value loans violates RBI norms.
- Penalty amounts: ₹1.61 crore and ₹71.3 lakh.
- Sectors: bank and NBFC.