The Reserve Bank of India (RBI) has imposed a heavy fine on Bank of Baroda, which is among the top-5 government banks of the country. A fine of crores of rupees has also been imposed on Citi Bank and Indian Overseas Bank. A total fine of Rs 10.34 crore has been imposed on the three banks. The highest penalty has been imposed on Citi Bank and Bank of Baroda.
RBI has used its regulatory powers to impose fine on all three banks. The central bank says that Section 26A of the Banking Regulation Act-1949 gives it the right to impose fine on the three banks. After all, why have all three banks been fined?
5 crore fine imposed on Citi Bank
RBI has imposed the maximum fine of Rs 5 crore on Citi Bank. This penalty has been imposed on the bank for ignoring the rules related to the Depositors Education and Awareness Fund Scheme. Along with this, a lot of negligence has been seen on the part of the bank in the rules related to outsourcing of banking services.
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Bank of Baroda will give Rs 4.34 crore
Apart from Citi Bank, the central bank has also imposed a fine of Rs 4.34 crore on public sector Bank of Baroda. This penalty has been imposed on the bank for violating rules related to Central Depository and other matters. At the same time, a fine of Rs 1 crore has been imposed on another government sector bank, Indian Overseas Bank, for violation of loan related guidelines.
The Reserve Bank of India regulates all types of commercial banks, co-operative banks, payments banks and non-banking finance banks in the country. Therefore, he keeps reviewing the functioning of banks from time to time. RBI ensures that the interests of the bank’s customers are protected.
