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In a significant enforcement action, the Reserve Bank of India (RBI) on Thursday imposed monetary penalties totalling Rs 1.29 crore on three major banks – Kotak Mahindra Bank, IDFC First Bank, and Punjab National Bank (PNB) – for various regulatory non-compliances.
The punitive measures, announced by the apex bank, stem from lapses related to customer service standards, Know Your Customer (KYC) protocols, and irregularities in loan disbursement practices.
Though the RBI has made it clear that the fines will not directly impact bank customers or their accounts, the enforcement actions are a pointed reminder of the regulatory body’s growing scrutiny over banking operations and its intolerance for procedural violations.
Public sector heavyweight Punjab National Bank (PNB) was penalised Rs 29.60 lakh for wrongful recovery of charges on inactive accounts. The bank was found to have levied penalties for non-maintenance of minimum balances in accounts that had been dormant – a violation of norms. Following a detailed examination, the RBI issued its order on April 4, 2025, under provisions of the Banking Regulation Act, 1949.
Private lender IDFC First Bank came under the RBI’s scanner for deficiencies in its customer due diligence processes. According to the apex bank, IDFC First Bank failed to adhere to mandatory KYC norms while opening current accounts for several sole proprietorship firms. This lapse led to the imposition of a fine amounting to Rs 38.60 lakh.
Kotak Mahindra Bank, one of the leading private banks, faced the stiffest penalty among the three. The RBI levied a Rs 61.40 lakh fine for non-compliance with certain directions on ‘Guidelines on Loan System for Delivery of Bank Credit’ and ‘Loans and Advances – Statutory and Other Restrictions’, reported Economic Times. The bank was reportedly penalised for irregularities in the sanctioning and distribution of working capital limits to borrowers, and non-compliance in margin requirements for intraday trading limits granted to select stockbrokers.
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