RBI Penalty on Bank: The Reserve Bank of India has been taking different actions on banks for ignoring the rules. Recently, the bank has taken major action on the country’s big public sector bank Canara Bank and imposed a fine of crores on it. RBI (RBI Action on Bank) has imposed a penalty of Rs 2.92 crore on the bank. The Reserve Bank said that this action has been taken on the bank for linking interest rates to external benchmarks like repo rate and opening savings accounts of ineligible people.
Fraud complaint was received
The central bank informed that earlier on March 31, 2021, the Reserve Bank had conducted a statutory inspection to examine the financial functioning of Canara Bank. The central bank did this inspection in July 2020 after receiving a complaint of fraud by another bank. In its investigation, the RBI found that the bank had failed to link the interest rates on loans provided to retail and MSMEs based on floating rate to an external benchmark. Along with this, the bank also failed to link the interest rate to be charged on the new floating rate based rupee loan with the Marginal Cost of Lending Rate (MCLR) in the financial year 2020-21.
Ignoring the rules in opening a savings account
Along with this, the central bank also told that Canara Bank opened savings accounts in the name of many ineligible entities and also entered fake mobile numbers in many credit card accounts. Along with this, the bank has also failed to pay interest on the accounts opened under the Daily Deposit Scheme. RBI also pointed out that the bank took MMS charges from those accounts which were not even being actually used. Along with this, the bank has also failed to issue alerts on the basis of transactions.
What will be the effect on customers
After ignoring several rules in its investigation, the Reserve Bank issued show cause notices to Canara Bank in all these cases. In this, the bank was asked why action should not be taken on it. Thereafter, the bank gave oral and written reply. Then RBI imposed a penalty of Rs 2.92 crore on the bank. In such a situation, the question arises that what will be the effect of this fine on the customers of the bank, then let us tell you that the customers have nothing to do with this fine. This action has been taken due to operational matters on the bank and in such a situation it will not affect the customers in any way.