RBI imposed Rs. 40.4cr penalties on financial institutions in FY23
The Reserve Bank of India (RBI) has slapped financial institutions with penalties totaling Rs. 40.39 crore during the 2022-23 fiscal year, according to Minister of State for Finance Bhagwat Karad. Karad disclosed that the RBI had levied 176 penalties worth Rs. 14.04 crore on cooperative banks throughout the year. Private sector banks were fined Rs. 12.17 crore, public sector banks (PSBs) incurred Rs. 3.65 crore in penalties, and foreign banks were charged Rs. 4.65 crore.
Breakdown of penalties imposed by RBI
Small finance banks faced fines of Rs. 0.97 crore and regional rural banks were penalized Rs. 0.42 crore. Housing finance companies (HFCs) incurred Rs. 0.10 crore in fines and non-banking financial companies (NBFCs) were charged Rs. 4.39 crore. Karad explained that RBI is responsible for enforcing penalties in accordance with the Enforcement Policy and Framework approved by the RBI's Board for Financial Supervision. This includes imposing monetary penalties on regulated entities for violating various statutes and directives issued under them.
Guidelines on fair practices
To ensure fair practices, the RBI has also issued guidelines for banks, NBFCs, and HFCs to follow. These guidelines cover multiple aspects of lending and aim to promote transparency and ethical conduct in the financial sector. By adhering to these guidelines, financial institutions can avoid penalties and maintain a positive reputation in the industry.
