RBI imposes monetary penalty on Federal Bank Limited
Case Brief
RBI, by order dated February 04, 2025, imposed a monetary penalty of Rs 27.30 lakh on Federal Bank Limited. The penalty was levied under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, following supervisory inspection findings that the bank had not complied with RBI directions on 'Interest Rate on Deposits' and had opened certain savings deposit accounts in the name of ineligible entities.
RBI imposed a monetary penalty on Federal Bank Limited for non-compliance with certain directions issued on 'Interest Rate on Deposits'. In the supervisory inspection (ISE 2023), RBI found that the bank had opened certain savings deposit accounts in the name of ineligible entities. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, after considering the bank's reply, additional submissions, and oral hearing.
Severity Assessment
The action is a monetary penalty of Rs 27.30 lakh, which falls in the >Rs 5 lakh and <Rs 10 lakh band under the rubric; there is no separate operational restriction.
Federal Bank Limited must bear the monetary penalty; the order does not impose a continuing operational restriction. RBI also noted that the penalty is without prejudice to any other action that may be initiated against the bank.
Published as Federal Bank Limited
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Federal Bank Ltd.
Monetary penalty · Fresh imposition
Federal Bank Ltd.
Monetary penalty · Fresh imposition
Federal Bank Limited
Monetary penalty · Fresh imposition
Federal Bank Limited
Monetary penalty · Fresh imposition
The Federal Bank Ltd.
Monetary penalty · Fresh imposition
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