The Reserve Bank of India (RBI) has imposed monetary penalties on five financial institutions, including CSB Bank, Union Bank of India, and Muthoot Housing Finance Company, for violations of various regulatory norms, according to official statements released on Monday.
CSB Bank has been fined Rs 1.86 crore for non-compliance with RBI directives concerning the ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by Banks’ and the ‘Master Circular on Branch Authorisation.’ The penalties highlight deficiencies in the bank’s adherence to outsourcing risk management and branch authorization requirements.
Union Bank of India has been penalized Rs 1.06 crore for failing to comply with norms related to the ‘Creation of a Central Repository of Large Common Exposures-Across Banks’ and ‘Know Your Customer (KYC)’ regulations. These infractions reflect lapses in maintaining adequate central records and ensuring robust customer verification processes.
Muthoot Housing Finance Company has been fined Rs 5 lakh for non-compliance with specific provisions of the ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021.’ The RBI’s action underlines the importance of strict adherence to housing finance guidelines among non-banking financial institutions.
In addition, the RBI has imposed a Rs 5 lakh penalty on Nido Home Finance Limited and a Rs 3.1 lakh penalty on Ashoka Viniyoga Limited for their respective regulatory violations.
The RBI clarified that these penalties are a result of deficiencies in regulatory compliance and are not intended to question the validity of any transactions or agreements entered into by the entities.
