Here’s Why RBI Imposed Rs 2.27 Crore Monetary Penalty on RBL Bank

Here’s Why RBI Imposed Rs 2.27 Crore Monetary Penalty on RBL Bank
Credit: © Reuters.

By Malvika Gurung -- The Indian central bank Reserve Bank of India has imposed a ‘monetary penalty’ of Rs 2,27,25,000 on the private lender RBL Bank (NS: RATB ) for failure to comply with some of its directives.

The banking regulator fined RBL Bank on March 20, 2023, for non-compliance with certain provisions of RBI relating to two key areas, including the Internal Ombudsman Scheme 2018, and recovery agents engaged by the bank.

The penalty action comes after RBI noticed deficiencies in regulatory compliance during examinations and observations relating to two financial years - FY19 (2018-19) and FY22 (2021-22).

RBL Bank failed to ensure that the loan recovery agents it engaged during those periods did not resort to intimidation or harassment and that it did not ensure police verification of the agents before employing them, RBI said.

However, the Mumbai-based lender has ensured that it has as a result, further strengthened its internal processes and procedures around the underlined aspects.

“The Bank has always endeavoured to maintain the highest standards of Compliance and Culture within the organization and shall continue to do so,” RBL Bank said in an exchange filing.

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