RBI Imposes Penalties on Central Bank of India and Sonali Bank

The Reserve Bank of India has imposed a penalty of Rs 1.45 crore on the Central Bank of India for non-compliance with directions related to loans and customer protection. Additionally, a penalty of Rs 96.4 lakh was imposed on Sonali Bank PLC for KYC violations. These penalties highlight deficiencies in regulatory compliance.

The Reserve Bank of India (RBI) has levied a penalty of Rs 1.45 crore on the Central Bank of India over lapses in adhering to directions on loans and advances, as well as customer protection protocols.

This follows a statutory inspection conducted by the RBI for Supervisory Evaluation (ISE 2022), which assessed the financial health of the Central Bank of India as of March 31, 2022.

The RBI issued a notice requiring the bank to explain its non-compliance, and after reviewing the response, confirmed the charges, leading to the penalty.

Specifically, the bank was found to have sanctioned a working capital demand loan to a corporation against government receivables and failed to credit unauthorized electronic transaction amounts back to customer accounts in a timely manner.

Furthermore, the RBI also imposed a penalty of Rs 96.4 lakh on Sonali Bank PLC for failing to comply with KYC directions. The penalties, however, do not question the validity of customer transactions.