Home / Business and Economy / RBI Fines Bank of Baroda Rs 63.6 Lakh for Fair Practice Violations
RBI Fines Bank of Baroda Rs 63.6 Lakh for Fair Practice Violations
4 Jul
Summary
- Bank of Baroda fined Rs 63.6 lakh for unfair lending and KYC breaches.
- GIC Housing Finance also penalized Rs 3.1 lakh for KYC guideline non-compliance.
- Penalties are for regulatory breaches, not to invalidate customer transactions.
The Reserve Bank of India (RBI) has levied a significant penalty of Rs 63.6 lakh on Bank of Baroda. This action stems from the bank's non-compliance with provisions of the 'Fair Practices Code for Lenders' and 'Know Your Customer' (KYC) norms. Specifically, the public sector lender was found to have charged interest exceeding contracted rates in certain loan accounts.
Furthermore, Bank of Baroda failed to upload KYC records for some customers to the Central KYC Records Registry within the stipulated timeframe. In a separate instance, GIC Housing Finance Ltd has been penalized Rs 3.1 lakh for deficiencies in adhering to KYC guidelines. This includes not implementing a periodic system for reviewing account risk categorization at least every six months.
These penalties underscore the RBI's commitment to regulatory compliance. The central bank emphasized that these actions are based solely on identified compliance failures and do not question the validity of any transactions or agreements made by the penalized entities with their customers. The inspections were conducted with reference to the financial positions as of March 31, 2025.
