Case Brief
What Happened
By an order dated March 06, 2023, the Reserve Bank of India imposed a monetary penalty of Rs 2,27,25,000 on RBL Bank Limited. The penalty was imposed for non-compliance with RBI directions on the Internal Ombudsman Scheme, 2018, Fair Practices Code for Lenders, Credit Card Operations of Banks, Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks, and Recovery Agents engaged by Banks. RBI’s examination of complaints for FY 2020-21 and FY 2021-22, and related correspondence, found that the bank had not properly communicated Internal Ombudsman decisions in some cases, had not adequately ensured that recovery agents did not intimidate or harass borrowers, had not ensured required training and IIBF certification before onboarding recovery agents, had not carried out pre-employment police verification of recovery agents, and had not informed borrowers about the recovery agency details when referring cases. RBI concluded the non-compliance was substantiated and warranted a penalty under the Banking Regulation Act, 1949.