RBI Imposes Penalties on Indian Bank and Mahindra Finance for Regulatory Violations

Penalty on Indian Bank – ₹1.61 Crore:

• The Reserve Bank of India (RBI) fined Indian Bank ₹1.61 crore for:
  • Failing to benchmark interest rates correctly on certain floating rate retail and MSME loans.
  • Taking collateral on small-value Kisan Credit Card (KCC) loans, which violates RBI norms.

Penalty on Mahindra & Mahindra Finance – ₹71.3 Lakh:

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• The RBI imposed a ₹71.3 lakh penalty on Mahindra & Mahindra Financial Services for:
  • Non-disclosure of processing fees and charges to some loan customers.
  • Auctioning vehicles without giving some borrowers a prior opportunity to repay, breaching fair lending practices.

RBI’s Objective

• These actions highlight the RBI’s commitment to ensuring:
  • Transparent loan pricing
  • Fair treatment of borrowers
  • Strict adherence to regulatory frameworks in both banking and NBFC sectors