Summary of this article
RBI fined Bank of Baroda Rs 63.6 lakh for regulatory lapses.
GIC Housing Finance penalised Rs 3.1 lakh over KYC deficiencies.
RBI clarified penalties do not impact customer transactions or agreements.
The Reserve Bank of India (RBI) has imposed a penalty of Rs 63.60 lakh on Bank of Baroda (BoB) for violating certain provisions of its Fair Practices Code for Lenders, and Know Your Customer (KYC) directions. Separately, it has also imposed a penalty of Rs 3.10 lakh on GIC Housing Finance for failing to comply with KYC guidelines.
The RBI has said that the penalties relate only to regulatory compliance issues and do not affect the validity of any transaction or agreement between the entities and their customers.
Bank of Baroda Fined for Multiple Lapses
The RBI has said that the penalty against Bank of Baroda has been imposed following a statutory inspection to gauge the bank’s financial position as on March 31, 2025. Based on the findings, RBI issued a notice asking the bank to explain why action should not be taken.
On reviewing the bank’s response and available records, RBI found that the bank has collected interest at a rate higher than the agreed rate for some loan accounts. It also observed that the bank did not upload the KYC information of some customers within the stipulated time frame to the Central KYC Records Registry (CKYCR).
These lapses led to the penalty of Rs 63.60 lakh.
GIC Housing Finance Penalised for KYC Deficiency
In a separate statement, RBI said that the National Housing Bank had conducted a statutory inspection of GIC Housing Finance with reference to its financial position as on March 31, 2025. A notice was issued to the company after the inspection.
The regulator has found that GIC Housing Finance had not put in place a system to periodically review the risk categorisation of customer accounts. Under the KYC guidelines, such reviews must be carried out at least once every six months.
For this non-compliance, the RBI imposed a penalty of Rs 3.10 lakh.
Penalties Do Not Affect Customer Agreements
The RBI has, however, clarified that the action against both entities was based solely on deficiencies in regulatory compliance. It added that the penalties should not be viewed as questioning the validity of any transaction or agreement entered into by the institutions with their customers.
