RBI Imposes Rs 30 lakh Penalty on Karur Vysya Bank

Current Context: Reserve bank of India imposed a penalty on Karur Vysya Bank of Rs 30 lakh.The reason being for non-compliance with certain provisions related to fraud and complaints by commercial banks.

RBI conducted a Select Scope Inspection of the bank during February 21 to March 4 in 2022.
The results of the SSI report revealed that the bank failed to report a few accounts as frauds to the RBI within a week of the respective Joint Lenders' Forum (JLF) decisions.
A notice was issued to Karur Vysya Bank and asked for a clarification of the same. An amount of Rs.30 lakh is being currently imposed for these non compliances.
After considering the bank's reply, oral submissions and additional submissions made by the bank, the RBI came to the conclusion that the charge of non-compliance with the directions was substantiated and warranted the imposition of a monetary penalty.
The RBI reported that the penalty is on deficiencies in compliance of regulatory activities and is not intended to effect upon the validity of any transaction or agreement done by the customers.