RBI Penalties on Union Bank, Central Bank, Bank of India and Pine Labs
Why in the news
The Reserve Bank of India fined three public sector banks and one fintech firm for not following regulatory norms.
Penalties and lapses
| Entity | Penalty | Lapse |
|---|---|---|
| Union Bank of India | ₹95.40 lakh | Did not credit customers within 10 working days in unauthorised electronic transactions; breached digital payment customer protection norms |
| Central Bank of India | ₹63.60 lakh | KYC deficiencies; BSBDA and financial inclusion guideline lapses |
| Bank of India | ₹58.50 lakh | PSL non-compliance: unauthorised fees on small-ticket loans (up to ₹25,000); no interest paid on TDRs after maturity |
| Pine Labs | ₹3.10 lakh | PPI norm violation: full-KYC PPIs issued without proper KYC checks |
Key concepts
- KYC: identity verification of customers; helps prevent fraud, money laundering and financial crime.
- PSL: RBI mandate for banks to lend part of their credit to sectors such as agriculture, MSMEs and weaker sections.
- PPI: instruments that store value for payments, for example wallets and prepaid cards.
- BSBDA: Basic Savings Bank Deposit Account, a zero-balance account for financial inclusion.
Exam angle
- Highest penalty: Union Bank of India, ₹95.40 lakh.
- Only non-bank entity fined: Pine Labs, ₹3.10 lakh.
- Full forms: PSL, PPI, BSBDA, KYC.