New Delhi: The Reserve Bank of India (RBI) has imposed a penalty of ₹63.6 lakh on Bank of Baroda for non-compliance with provisions related to the Fair Practices Code for Lenders and Know Your Customer (KYC) norms.
The central bank has also levied a penalty of ₹3.1 lakh on GIC Housing Finance Ltd for violating certain provisions of the KYC guidelines.
Action against Bank of Baroda
According to the RBI, the penalty follows a statutory inspection conducted to assess the financial position of Bank of Baroda as on March 31, 2025.
After the inspection, the central bank issued a notice to the public sector bank. Following an examination of the bank’s response, the RBI concluded that the lender had collected interest exceeding the contracted rate in certain loan accounts.
The RBI also found that the bank had failed to upload the KYC records of certain customers to the Central KYC Records Registry (CKYCR) within the prescribed timeline.
Penalty on GIC Housing Finance
In a separate action, the RBI imposed a ₹3.1 lakh penalty on GIC Housing Finance Ltd following a statutory inspection carried out by the National Housing Bank (NHB) based on the company’s financial position as of March 31, 2025.
The regulator said the housing finance company had failed to establish a system for periodic review of the risk categorisation of customer accounts, as required under KYC guidelines. Such reviews are mandated to be conducted at least once every six months.
RBI clarifies purpose of penalties
The RBI clarified that both penalties have been imposed solely for deficiencies in regulatory compliance.
It emphasised that the action does not question the validity of any transactions or agreements entered into by either institution with their customers.
The central bank said regulated entities are expected to strictly adhere to its guidelines to ensure transparency, customer protection and compliance with banking regulations.