RBI imposes Rs 30 lakh penalty on Karur Vysya Bank for non-compliance with regulations

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 30 lakh on Karur Vysya Bank Ltd for non-compliance with certain provisions under Frauds-Classification. 

The bank has been penalized for 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. 

RBI conducted a Select Scope Inspection (SSI) during the period from February 21, 2022 to March 04, 2022 and identified those banks that failed to report a few accounts as frauds to RBI within a week of the respective Joint Lenders’ Forum (JLF) decisions to do so. Alongside, a notice has been issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions issued by RBI, as stated therein.  

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, the RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, a press release said. 

Further, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions issued by RBI. 

Also Read: Govt has no plans of returning to the Old Pension Scheme: Finance Ministry sources