In the first week of July, the Reserve Bank of India (RBI) penalized Punjab National Bank (PNB) and four other banks for non-compliance with various RBI directions.
PNB was penalized with a penalty of Rs 1.31 crore, becoming the fifth bank for getting the brunt of the apex bank.
The Gujarat Rajya Karmachari Co-operative Bank, Gujarat; The Rohika Central Co-operative Bank, Madhubani, Bihar; The National Co-operative Bank, Mumbai, Maharashtra; and The Bank Employees’ Co-operative Bank, West Bengal were the four banks which were fined by the RBI.
The penalty on PNB was imposed on July 3, 2024 for non-compliance with RBI directions regarding ‘Loans and Advances: Statutory and Other Restrictions’ and the ‘Reserve Bank of India (Know Your Customer (KYC) Direction, 2016’.
The RBI said, “The Reserve Bank of India (RBI) has, by an order dated July 03, 2024, imposed a monetary penalty of Rs 1,31,80,000 (Rupees One crore thirty-one lakh eighty thousand only) on Punjab National Bank (the bank) for non-compliance with certain directions issued by RBI.”
“This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and section 51(1) of the Banking Regulation Act, 1949,” the RBI said in a statement on Friday.
The RBI conducted the Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank with reference to its financial position as on March 31, 2022.
Further, a notice was issued to the bank based on supervisory findings of non-compliance with RBI directions and related correspondence. The central bank advised it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions.
After considering the PNB’s reply to the notice and oral submissions made during the personal hearing, RBI found that the charges against the bank were sustained, warranting imposition of monetary penalty, the top bank said.
Punjab National Bank sanctioned working capital demand loans to two state government owned corporations against amounts receivable from Government by way of subsidies/ refunds/ reimbursements, it is a violation of its directions, RBI further said.
As per the Reserve Bank of India, the PNB also failed to preserve records pertaining to the identification of customers and their addresses obtained during the course of a business relationship in certain accounts.
