RBI imposes monetary penalty on Dhanlaxmi Bank and 2 other for rule violations

Separately, RBI also imposed Rs 6 lakh on Sakthi Finance as the company did not undertake risk categorisation of its customers and carry out periodic updation of KYC for its high-risk customers

The Reserve Bank of India (RBI) on January 12 said that it has imposed monetary penalties on ESAF Small Finance Bank, Dhanlaxmi Bank, and Punjab and Sind Bank.

The central bank imposed Rs 1.20 crore on Dhanlaxmi Bank, Rs 1 crore on Punjab and Sind Bank, and Rs 29.55 lakh penalty on ESAF Small Finance Bank.

Dhanlaxmi Bank has sanctioned loans to certain borrowers against pledge of gold ornaments and jewellery for non-agricultural purposes exceeding 75 per cent of the value of gold ornaments and jewellery, offered interest rate applicable to normal term deposits on certain senior citizen term deposits instead of a higher rate of interest applicable to such deposits, hence penalised.

The bank also did not obtain PAN or Form 60 for certain term deposit accounts (exceeding fifty thousand rupees), and allotted multiple Customer Identification Codes to certain individual customers instead of a Unique Customer Identification Code (UCIC) to each customer, a release from the central bank said.

Further, Punjab and Sind Bank was penalised as it sanctioned a term loan to a Corporation in lieu of or to substitute budgetary resources envisaged for certain projects and without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations; and the repayment/servicing of which was made out of budgetary resources.

ESAF Small Finance Bank was penalised as the bank to the extent it allowed its certain Basic Savings Bank Deposit (BSBD) account holders to open savings bank deposit accounts and failed to close certain savings bank deposit accounts within 30 days from the date of opening of BSBD accounts for such customers.

Separately, RBI also imposed Rs 6 lakh on Sakthi Finance as the company did not undertake risk categorisation of its customers and carry out periodic updation of KYC for its high-risk customers during the financial year 2021-22, as part of ongoing due diligence of its customers.