RBI Imposes Penalty Of Rs1.25 Cr On 3 Banks

These actions are based on deficiencies in statutory and regulatory compliance of concerned banks

FinTech BizNews Service

Mumbai, 13 February 2026: The Reserve Bank of India (RBI) has, imposed a monetary penalty on 3 different banks. The highest and lowest monetary penalty amount ranges from Rs63.60 lakh to Rs29.60 lakh.

1 The Reserve Bank of India (RBI) has, by an order dated February 06, 2026, imposed a monetary penalty of Rs63.60 lakh (Rupees Sixty Three Lakh Sixty Thousand only) on CSB Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Scope of activities to be undertaken of Business Correspondents (BCs)’ and ‘Customer Service in Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with the provisions of RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions of RBI directions.

After considering the bank’s reply to the notice and additional submissions made by it, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:

1. The bank entered into an arrangement with BCs for undertaking activities, which are not covered within the scope of activities that can be undertaken by BCs; and
2. The bank levied charges in certain savings bank accounts without ensuring that customers were made aware of such charges upfront.

This action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

2 The Reserve Bank of India (RBI) has, by an order dated February 06, 2026, imposed a monetary penalty of Rs29.60 lakh (Rupees Twenty Nine Lakh Sixty Thousand only) on DCB Bank Limited (the bank) for non-compliance with certain directions issued by RBI on loans extended against pledge of gold ornaments and jewellery for non-agricultural end uses. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on the supervisory findings of non-compliance with the provisions of RBI, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions of RBI.

After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found that the following charge against the bank was sustained, warranting imposition of monetary penalty:

The bank failed to maintain the prescribed loan-to-value (LTV) ratio in certain non-agricultural gold loan accounts during the tenure of such loans.

The action is based on deficiencies in statutory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

3 The Reserve Bank of India (RBI) has, by an order dated February 06, 2026, imposed a monetary penalty of Rs32.50 lakh (Rupees Thirty Two Lakh Fifty Thousand only) on Bank of Maharashtra (the bank) 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’. This 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.

The Statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with the provisions of RBI directions and related correspondence in that regard, 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.

After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:

1. The bank did not report Self Help Group member level data to Credit Information Companies; and
2. The bank did not identify Beneficial Owners in certain accounts.

The action is based on 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. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.