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• Reserve Bank of India imposed a monetary penalty of INR 31.80 lakh on YES Bank for non-compliance with certain Know Your Customer (KYC) provisions linked to Central KYC Records Registry identifiers.
• Separately, the central bank also levied a penalty of INR 1.8 lakh on Hinduja Housing Finance for non-compliance with governance-related regulatory directions.
• The actions follow supervisory inspections conducted by the RBI with reference to the financial position of the institutions.
• The regulator stated that the penalties were based on deficiencies in regulatory compliance and were not intended to question the validity of transactions or agreements entered into by the entities.
Reserve Bank of India has imposed a penalty of INR 31.80 lakh on YES Bank for non-compliance with provisions related to Know Your Customer (KYC) regulations. Advertisement
According to the RBI, the bank failed to establish a system for using the KYC Identifier assigned by the Central KYC Records Registry while establishing account-based relationships with customers. The central bank stated that the action followed a statutory inspection carried out as part of its supervisory evaluation process with reference to the bank’s financial position as of March 31, 2025.
The regulator noted that the penalty had been imposed in exercise of powers vested under the Banking Regulation Act and was based on deficiencies observed in regulatory compliance. The RBI also clarified that the action was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
KYC compliance remains a key regulatory requirement for banks and financial institutions in India, particularly in relation to anti-money laundering controls, customer verification procedures and risk monitoring frameworks. The use of the Central KYC Records Registry is aimed at creating a unified repository of customer KYC records to improve standardisation and reduce duplication across the financial system.
In a separate action announced earlier this week, the RBI also imposed a penalty of INR 1.8 lakh on Hinduja Housing Finance for non-compliance with certain governance-related directions issued by the regulator.
The central bank did not disclose detailed specifics regarding the governance lapses but stated that the action was linked to supervisory findings relating to compliance with regulatory requirements applicable to housing finance companies.
The enforcement measures form part of the RBI’s broader supervisory framework aimed at strengthening governance standards, operational controls and compliance mechanisms across banks, non-banking finance companies and housing finance institutions.
Over the past few years, the RBI has increased scrutiny of governance practices, KYC systems and risk management standards across regulated financial entities amid growing digitisation of financial services and expanding retail customer bases. Financial institutions have consequently been required to strengthen compliance systems, internal controls and reporting processes in line with evolving regulatory expectations.
Source - PTI
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