The Reserve Bank of India (RBI) on Friday said it has imposed a penalty of Rs 1.31 crore on Punjab National Bank (PNB) for non-compliance of certain directions related to ‘Know Your Customer’ (KYC) and ‘Loans and Advances’.
RBI Action: The Reserve Bank of India (RBI) on Friday said that it has imposed a fine of Rs 1.31 crore on Punjab National Bank (PNB) for not following certain instructions related to ‘Know Your Customer’ (KYC) and ‘Loans and Advances’. A few years ago, Gujarat diamond merchant Nirav Modi had committed a scam of about Rs 12 thousand crore in Punjab National Bank.
The Reserve Bank said that it conducted a statutory inspection with reference to the financial position of the bank as on March 31, 2022. After that a notice was issued to the bank. After considering the bank’s reply to the notice, the RBI found that PNB sanctioned working capital demand loans to two state government-owned corporations in lieu of the amount received from the government by way of subsidy / refund / reimbursement.
The Reserve Bank said that at the same time, the public sector lender failed to preserve records relating to the identity and address of customers obtained in the course of business relations in certain accounts of this bank. However, the central bank said that the fine is based on deficiencies in regulatory compliance and is not intended to have any effect on the validity of any transaction or agreement entered into by the bank with its customers.
