RBI’s Regulatory Crackdown: Penalties on Indian Bank and Indian Overseas Bank

The Reserve Bank of India (RBI) has imposed monetary penalties on Indian Bank and Indian Overseas Bank for non-compliance with regulatory norms. Indian Bank faces a fine of ₹1.60 crore for failing to benchmark interest rates on certain loans and violating collateral security norms for Kisan Credit Card loans and MSME loans. Additionally, the bank did not transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed timeframe. Indian Overseas Bank has been fined ₹63.60 lakh for similar violations, including obtaining collateral security for agricultural loans and MSME loans, contrary to RBI guidelines. These penalties highlight the RBI’s commitment to enforcing compliance and ensuring transparency in the banking sector. The central bank’s actions serve as a reminder to financial institutions to adhere strictly to regulatory directions to maintain trust and integrity in the financial ecosystem. This development underscores the importance of regulatory vigilance in safeguarding the interests of borrowers and promoting fair banking practices. Stay informed about the latest updates in the banking sector and the implications of these penalties on the affected institutions.