RBI Imposes ₹44.7 Lakh Penalty on Bandhan Bank for Regulatory Non-Compliance
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹44.7 lakh on Bandhan Bank Limited following an inspection that revealed several statutory and regulatory compliance deficiencies. The penalty was imposed under provisions of the Banking Regulation Act, 1949, specifically relating to failures in adhering to RBI directions on income recognition, asset classification, and provisioning processes. The RBI found that Bandhan Bank had paid commissions to certain employees and had performed manual interventions in account data without maintaining proper audit trails or logs capturing user activity. While the penalty highlights lapses in compliance, RBI clarified that it does not affect the validity of any transactions or agreements between Bandhan Bank and its customers. This regulatory action underscores RBI’s focus on ensuring financial institutions maintain rigorous controls and governance to safeguard market integrity and customer interests. The penalty does not have any material impact on Bandhan Bank’s financial or operational activities.
The Reserve Bank of India (RBI) has levied a monetary penalty of ₹44.7 lakh on Bandhan Bank Limited following a statutory inspection that revealed multiple
compliance lapses. The penalty comes as a result of violations under Section 10(1)(b)(ii) of the Banking Regulation Act, 1949, including non-adherence to
RBI directions related to automation of income recognition, asset classification, and provisioning processes.
The inspection highlighted that Bandhan Bank had paid commissions to certain employees, which is against regulatory norms. Additionally, the bank was found to have
performed manual interventions in account data without maintaining proper audit trails or logs to track specific user activities, violating system access and data
integrity requirements.
Though the penalty is imposed for regulatory breaches, RBI clarified that it does not impugn the validity of any transactions or agreements between Bandhan Bank
and its customers. The penalty underscores the RBI’s emphasis on strict governance and compliance standards to ensure transparency and accountability in the banking sector.
This action is expected to reinforce regulatory vigilance and signal to other financial institutions the importance of adhering to statutory guidelines. The bank has acknowledged
the penalty, and no material impact on its financial or operational activities has been reported so far.
Summary:
Bandhan Bank was fined ₹44.7 lakh by RBI for deficiencies in regulatory compliance, notably unauthorized commissions and inadequate audit trails, emphasizing
the regulator’s commitment to maintaining robust banking governance.
The Reserve Bank of India (RBI) has levied a monetary penalty of ₹44.7 lakh on Bandhan Bank Limited following a statutory inspection that revealed multiple
compliance lapses. The penalty comes as a result of violations under Section 10(1)(b)(ii) of the Banking Regulation Act, 1949, including non-adherence to
RBI directions related to automation of income recognition, asset classification, and provisioning processes.
The inspection highlighted that Bandhan Bank had paid commissions to certain employees, which is against regulatory norms. Additionally, the bank was found to have
performed manual interventions in account data without maintaining proper audit trails or logs to track specific user activities, violating system access and data
integrity requirements.
Though the penalty is imposed for regulatory breaches, RBI clarified that it does not impugn the validity of any transactions or agreements between Bandhan Bank
and its customers. The penalty underscores the RBI’s emphasis on strict governance and compliance standards to ensure transparency and accountability in the banking sector.
This action is expected to reinforce regulatory vigilance and signal to other financial institutions the importance of adhering to statutory guidelines. The bank has acknowledged
the penalty, and no material impact on its financial or operational activities has been reported so far.
Summary:
Bandhan Bank was fined ₹44.7 lakh by RBI for deficiencies in regulatory compliance, notably unauthorized commissions and inadequate audit trails, emphasizing
the regulator’s commitment to maintaining robust banking governance.