RBI in action
The Reserve Bank of India (RBI) has imposed a penalty of ₹1,31,80,000 (Rupees One crore thirty-one lakh eighty thousand) on Punjab National Bank (PNB) for not complying with certain RBI directions on ‘Loans and Advances – Statutory and Other Restrictions’ and ‘Know Your Customer (KYC) Direction, 2016’.
The Statutory Inspection for Supervisory Evaluation (ISE 2022) was conducted by RBI based on PNB’s position as on March 31, 2022. After the supervisory findings of non-compliance and related correspondence, RBI issued a notice to the bank asking it to explain why a penalty should not be imposed for not complying with the directions. After reviewing the bank’s response and oral submissions during a personal hearing, RBI found the following charges against PNB substantiated and therefore imposed the penalty: (i) PNB sanctioned working capital demand loans to two State Government-owned Corporations against amounts receivable from Government as subsidies/refunds/reimbursements, and (ii) PNB did not preserve customer identification records and address details obtained during business relationships in certain accounts.
This is not a comment on the transactions or agreements between the bank and its customers. This penalty is also not a bar to any other action that RBI may take.
