RBL Bank Fined Rs 61 Lakh By RBI For Not Complying With KYC Rules

The Reserve Bank of India has imposed a penalty of Rs 61.4 lakh on RBL Bank Ltd. for not complying with the know-your-customer norms, the central bank said in a release on Friday.

After an inspection, a show-cause notice was issued to the bank and based on its response, the RBI found that the bank did not obtain a prescribed officially valid document while opening certain credit card accounts.

The private sector bank had allotted multiple customer identification codes to certain customers instead of a unique customer identification code for each customer. RBL Bank had conducted statutory inspection for supervisory evaluation as on March 31, 2022 and March 31, 2023, according to the order dated Nov. 19.

The action comes days after RBI Deputy Governor Swaminathan J told bank boards to ensure that the KYC norms are followed amid a rise in complaints about flouting these regulations.

Swaminathan had said the central bank would not hesitate to take regulatory or supervisory actions against entities that fail to address these concerns in a timely and considerate manner.

He urged the bank boards to establish policies and adopt standard operating procedures that are not only compliant with regulatory guidelines but also practical for effective implementation.

While the RBI has comprehensively updated the master directions on the KYC in full alignment with the Financial Action Task Force and the Prevention of Money Laundering Act requirements, the way in which the guidelines are being implemented seems to be resulting in a number of accounts getting frozen, denying customers access to their funds, according to Swaminathan.

The share price of RBL Bank closed 0.70% higher at Rs 157.45 apiece on the BSE, compared to a 2.54% advance in the benchmark Sensex.