MUMBAI: The Reserve Bank of India announced on Friday that it has levied a fine of Rs 63.6 lakh on Bank of Baroda for failing to comply with certain provisions of the ‘Fair Practices Code for Lenders’ and ‘Know Your Customer (KYC)’ regulations.
A separate penalty of Rs 3.1 lakh was imposed on GIC Housing Finance Ltd for similar non-compliance with KYC guidelines.
The RBI stated it conducted a statutory inspection of Bank of Baroda to evaluate its supervisory practices as of March 31, 2025, leading to the issuance of a notice to the bank.
Upon reviewing the bank’s response, the RBI discovered that the public sector bank had charged interest rates exceeding the contracted rates in certain loan accounts. Moreover, it failed to upload KYC records for some customers to the Central KYC Records Registry (CKYCR) within the allotted timeframe.
In a similar instance, the RBI stated that GIC Housing Finance underwent a statutory inspection by the National Housing Bank as of March 31, 2025, resulting in a notice as well.
The company did not establish a regular system for reviewing the risk categorization of accounts, which should occur at least semi-annually, according to the RBI’s penalty rationale.
In both cases, the central bank affirmed that the fines reflect regulatory compliance shortcomings and do not assess the legitimacy of any transactions or agreements made by the entities with their customers.
