The Reserve Bank of India (RBI) took 79 enforcement actions against banks and NBFCs in FY25, of which 48 were against NBFCs, 30 against banks, and one against a credit Bureau. The total penalties amounted to ₹33 crore, according to a report by RBI recognised self-regulatory organisation FACE.

While only 38 per cent of the penalty cases were imposed on banks, they accounted for 82 per cent of the overall penalty amount. NBFCs, meanwhile, account for 60 per cent of the penalty cases but 18 per cent of the penalty amount. FACE did not include actions against Regional Rural Banks and Cooperative Banks for this report.

“The analysis suggests that actions (were taken) for a wide variety of reasons, including non-compliance with KYC norms, Fair Practices Code, Corporate governance, digital lending guidelines, reporting, interest rate, and conduct in outsourcing, among others,” FACE said.

J&K Bank

During FY25, J&K Bank received the highest monetary penalty of ₹3.31 crore for allowing certain Basic Savings Bank Deposit Account (BSBDA) holders to also open Savings Bank Deposit Accounts. The bank also did not identify beneficial owner for opening accounts of certain legal persons, who were not natural persons. Further, the bank allowed operations in certain small accounts that did not meet the regulatory requirements and sanctioned a working capital demand loan to a company against amounts receivable by way of subsidies from government.

UCO Bank and Axis Bank were fined ₹2 crore and ₹1.9 crore for violation of several regulatory norms, respectively.

Published on April 16, 2025