The Reserve Bank of India (RBI) has imposed penalties on two financial institutions, Indian Bank and Mahindra & Mahindra Financial Services, for non-compliance with regulatory requirements. Indian Bank has been fined Rs 1.61 crore for violating certain provisions of the Banking Regulation Act and failing to comply with directions related to interest rates on advances, the Kisan Credit Card (KCC) Scheme, and lending to the Micro, Small and Medium Enterprises (MSME) sector.
Mahindra & Mahindra Financial Services, on the other hand, has been penalized Rs 71.30 lakh for non-compliance with provisions related to non-banking financial companies and Know Your Customer (KYC) directions. The RBI emphasized that the penalties are not intended to question the validity of any transactions or agreements entered into by the entities with their customers, but rather to address deficiencies in regulatory compliance.
The penalties were imposed after the RBI conducted inspections and found that both institutions had failed to adhere to certain regulatory requirements. The RBI stated that the penalties are based on the deficiencies found during the inspections and are intended to ensure that financial institutions comply with regulatory requirements and maintain high standards of governance and customer protection.
The RBI’s actions serve as a reminder to financial institutions of the importance of complying with regulatory requirements and maintaining high standards of governance and customer protection. The penalties imposed on Indian Bank and Mahindra & Mahindra Financial Services demonstrate the RBI’s commitment to enforcing regulatory compliance and ensuring that financial institutions operate in a fair and transparent manner.
The penalties are also intended to promote a culture of compliance among financial institutions and to prevent similar non-compliances in the future. By imposing penalties, the RBI aims to ensure that financial institutions take regulatory requirements seriously and implement effective systems and processes to prevent non-compliances. Overall, the RBI’s actions are aimed at maintaining the stability and integrity of the financial system and protecting the interests of customers.