Context:
In FY25, the Reserve Bank of India (RBI) undertook 79 enforcement actions against regulated financial entities, according to a report by FACE (Fintech Association for Consumer Empowerment), a recognised self-regulatory organisation.
Breakdown of Enforcement Actions
- Total actions: 79
- NBFCs: 48 actions (60%)
- Banks: 30 actions (38%)
- Credit Bureaus: 1 action (2%)
- Total penalties levied: ₹33 crore
Penalty Distribution
- Banks:
- Accounted for 82% of total penalty amount
- Faced 38% of cases
- NBFCs:
- Accounted for 18% of total penalty amount
- Incurred 60% of cases
Note: Regional Rural Banks and Cooperative Banks were not covered in this report.
Common Reasons for Regulatory Action
- Non-compliance with KYC norms
- Violations of the Fair Practices Code
- Issues related to corporate governance
- Breaches in digital lending guidelines
- Deficiencies in reporting, interest rate disclosure
- Improper conduct in outsourcing arrangements
Major Penalties in FY25
- J&K Bank – ₹3.31 crore
- Opened both BSBDA and Savings Accounts for same customers
- Failed to identify beneficial owners in legal person accounts
- Allowed non-compliant operations in small accounts
- Improperly sanctioned working capital loans against government subsidies
- UCO Bank – ₹2 crore
- Penalised for violations of several regulatory norms
- Axis Bank – ₹1.9 crore
- Also fined for multiple regulatory breaches
