The action was taken after examining the bank’s reply to the notice sent to the bank. The bank was inspected by the RBI in July 2020 based on a fraud reported by another bank. The RBI informed that after examining the risk assessment report, due diligence report and all related correspondence, the action was taken in case of non-compliance of RBI instructions.
The central bank has indicated that the bank has failed to comply with the RBI directive on interest on floating rate retail loans and MSME loans. It is indicated that the floating rate loan interest sanctioned and revised in the financial year 2020-21 has failed to link with the MCLR rate.
It has been found that several savings deposit accounts have been opened in the bank in the name of undeserving entities and dummy mobile numbers have been registered in several credit card accounts. It is alleged that there was failure to pay interest on deposits received under the Daily Deposit Scheme and SMS alert charges were levied on customers not based on actual usage.
The RBI clarified that the penalty was imposed for failure to comply with the said instructions and the action was not based on any transaction or agreement with the bank’s customers. This will not affect customers