Case Brief
What Happened
By an order dated May 09, 2023, RBI imposed a monetary penalty of Rs 2.92 crore on Canara Bank for non-compliance with several RBI directions. The cited directions included those on interest rates on advances and deposits, compliance function in banks, customer protection in unauthorized electronic banking transactions, customer service, and KYC. RBI said the bank had failed in several respects, including benchmark-linked pricing for floating-rate loans, proper MCLR linkage, opening savings accounts for ineligible entities, using dummy mobile numbers in credit card accounts, paying interest on certain deposits, charging SMS alerts on actual usage basis, and maintaining ongoing customer due diligence and alert systems. RBI stated the penalty was based on regulatory deficiencies and not intended to pronounce on the validity of any customer transaction or agreement.