RBI imposed fine on this bank and finance company, they will have to pay this much amount

Reserve Bank Of India: The Reserve Bank of India (RBI) has imposed a fine on private sector IndusInd Bank and Manappuram Finance to ensure financial discipline. This action is based on the violation of rules by the respective institutions.

Rs 27.30 lakh fine on IndusInd Bank

This action has been taken against IndusInd Bank for violation of rules related to interest rate on deposits. After inspection of the financial position of IndusInd Bank as on March 31, 2023, RBI found that the bank had opened savings deposit accounts in the name of some ineligible entities. In this regard, a notice was issued to the bank, and after considering the bank's reply and additional submissions, a fine of Rs 27.30 lakh was imposed.

RBI clarified that this fine is based only on deficiencies in regulatory compliance. It is not intended to question the validity of any transaction or agreement between the bank and its customers.

Manappuram Finance fined Rs 20 lakh

The action against Manappuram Finance has been taken due to violation of "Know Your Customer" (KYC) norms. RBI, in its inspection of the company's financial position as on March 31, 2023, found that the company failed to use the PAN card verification facility during the customer acceptance process.

Further, Manappuram Finance, instead of giving one Unique Customer Identification Code (UCIC) to some customers, allocated multiple codes. This mistake reflects a serious deficiency in the KYC process. Based on these violations, RBI imposed a fine of Rs 20 lakh on the company.

RBI's View

RBI has clarified in both the cases that these fines are based only on deficiencies in regulatory compliance. It is not intended to comment on the validity of any financial transactions carried out by these institutions.

Conclusion

This action reflects RBI's commitment to promote transparency and discipline in the Indian financial system. The imposition of fines on major institutions like Indusind Bank and Manappuram Finance is a strong message to other institutions that violation of rules is not acceptable under any circumstances. It is important for financial institutions to strictly follow regulatory standards in customer service and operational processes.