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RBI Imposes monetary penalty on PNB, Federal Bank

Published on November 06, 2023
Current Context: The Reserve Bank of India (RBI) has imposed monetary penalties on Punjab National Bank (PNB), Federal Bank, and two non-banking finance companies (NBFCs) for rule violations.
RBI Imposes monetary penalty on PNB, Federal Bank
  • Here are the details:
    • Punjab National Bank (PNB): A penalty of Rs 72 lakh has been imposed for non-compliance with certain provisions related to 'interest rate on advances’ and ’customer service in banks’. The violations include levying SMS charges on certain accounts despite maintaining invalid mobile numbers in the Core Banking Solution (CBS), not strictly adhering to the interest rates as per the pre-disclosed schedule in several term deposit accounts, and failing to specify the interest reset date in MCLR-linked loans.
    • Federal Bank: A penalty of Rs 30 lakh has been imposed for contravention of certain provisions of KYC norms. The bank was penalized for issuing demand drafts, each valued at rupees fifty thousand and above, without including the name of the purchaser on the face of the drafts.
    • Mercedes-Benz Financial Services: A penalty of Rs 10 lakh has been imposed for non-compliance with certain provisions of the Know Your Customer (KYC) Direction, 2016.
    • Kosamattam Finance: A monetary penalty of Rs 13.38 lakh has been imposed for non-compliance with certain provisions of the 'Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’.

Question:

Q.1 Which bank was penalized by the RBI for non-compliance with certain provisions related to 'interest rate on advances’ and ’customer service in banks’?
a. Federal Bank
b. Punjab National Bank
c. Mercedes-Benz Financial Services
d. Kosamattam Finance
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