Monetary penalty on Punjab National Bank

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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1,31,80,000 on Punjab National Bank for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’, and ‘Reserve Bank of India (Know Your Customer (KYC) Direction, 2016’.  This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and section 51(1) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. ISE found non-compliance with RBI directions.   The RBI, considering reply to its the notice and oral submissions made during the personal hearing, found, inter alia, that the charges against the bank were sustained and it warranted imposition of monetary penalty. The following charges as per RBI were sustained against the bank

  • Sanctioned working capital demand loans to two State Government owned Corporations against amounts receivable from Government by way of subsidies/ refunds/ reimbursements, and
    • failed to preserve the records pertaining to the identification of customers and their addresses obtained during the course of business relationship in certain accounts.