RBI penalises 14 banks for non-adherence to rules on lending to NBFCs

The Reserve Bank of India on Wednesday penalised fourteen banks including State Bank of India, Bank of Baroda, IndusInd Bank and Bandhan Bank. Lenders were fined for non-compliance with certain provisions of directions issued by the regulator on lending to non-bank lenders, restrictions and provisions on loans and advances and reporting to the central database on large exposures.

While Bank of Baroda was levied a penalty of Rs 2 crore, IndusInd Bank, Bandhan Bank, Credit Suisse AG, Central Bank of India, Bank of Maharashtra, Indian Bank, Utkarsh Small Finance Bank were asked to cough up Rs 1 crore as fine. A penalty of Rs 50 lakh was imposed on State Bank of India.

RBI said a scrutiny was carried out and it was observed that the banks had failed to comply with provisions of the Banking Regulation Act. Notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance. After examining the responses, the regulator
concluded that it warranted imposition of monetary penalty on these banks.