RBI imposes monetary penalty on Bank of India and IIFL Finance Ltd
New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 32.50 lakh on Bank of Maharashtra for non-compliance with certain provisions of directions issued by RBI on ‘Credit information reporting in respect of Self Help Group members’ and ‘Know Your Customer’.
The penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005 and section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
A Notice was 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 said provisions of RBI directions.
Following charges against the bank were sustained, warranting imposition of monetary penalty:
- The bank did not report Self Help Group member level data to Credit Information Companies; and
- The bank did not identify Beneficial Owners in certain accounts.
The imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
Additionally, the central bank has imposed a monetary penalty of Rs 5.30 lakh on IIFL Finance Limited for non-compliance with certain directions issued by RBI on ‘Asset Classification’.
The penalty has been imposed in exercise of powers conferred on RBI under section 58G(1)(b) read with section 58B (5) (aa) of the Reserve Bank of India Act, 1934. The company failed to classify certain accounts as ‘non-performing asset’, on restructuring.