RBI imposes monetary penalty on Bank of Baroda, 2 others for rule violation

The Reserve Bank of India (RBI) on February 3 said it has imposed monetary penalties on Bank of Baroda, North East Small Finance Bank and Krazybee Services Private Limited for rule violation.

The central bank imposed a Rs 30 lakh penalty on Bank of Baroda, Rs 42.48 lakh on Krazybee Services Private Ltd and Rs 39.50 lakh on North East Small Finance Bank.

The RBI's inspection report on Bank of Baroda showed that the lender breached the transaction limits in small accounts and failed to ensure that the interest rates applied in certain term deposit accounts were as per the schedule of interest rates disclosed in advance, a release said.

Krazybee Services failed to ensure that its recovery agents did not resort to harassment or intimidation of customers while collecting debt.

While North East Small Finance Bank failed to classify "borrowal accounts" as non-performing assets (NPAs), leading to a significant divergence between the reported and assessed NPAs as on March 31, 2020 and made Pillar 3 disclosures for FY 2019-20 in its Annual Report and website.

The RBI said this action was based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.