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The Reserve Bank of India (RBI) has imposed monetary penalties on Bank of Baroda and GIC Housing Finance Ltd for deficiencies in regulatory compliance identified during statutory inspections. Bank of Baroda has been fined INR 63.6 lakh for non-compliance with provisions relating to the Fair Practices Code for Lenders and Know Your Customer (KYC) norms, while GIC Housing Finance has been penalised INR 3.1 lakh for shortcomings in implementing KYC risk review requirements. The RBI clarified that the penalties relate to regulatory compliance deficiencies and do not affect the validity of transactions or agreements entered into with customers.
The Reserve Bank of India (RBI) has imposed a monetary penalty of INR 63.6 lakh on Bank of Baroda for non-compliance with certain provisions of the Fair Practices Code for Lenders and the Know Your Customer (KYC) directions. In a separate action, the central bank has also levied a penalty of INR 3.1 lakh on GIC Housing Finance Ltd for deficiencies relating to compliance with KYC guidelines.
According to the RBI, the penalty on Bank of Baroda followed a statutory inspection conducted as part of its supervisory evaluation, based on the bank's financial position as of March 31, 2025. After the inspection, the central bank issued a notice to the public sector lender seeking an explanation for the identified compliance issues.
Following an examination of the bank's response, the RBI found that Bank of Baroda had charged interest at rates higher than those contractually agreed in certain loan accounts. The regulator also observed that the bank had failed to upload Know Your Customer (KYC) records of certain customers to the Central KYC Records Registry (CKYCR) within the prescribed timelines.
In a separate statement, the RBI said GIC Housing Finance Ltd was penalised following a statutory inspection carried out by the National Housing Bank (NHB), with reference to the company's financial position as of March 31, 2025. A notice was subsequently issued to the housing finance company regarding the observed compliance deficiencies.
The central bank found that GIC Housing Finance had not established a system for the periodic review of customer risk categorisation, despite regulatory requirements mandating that such reviews be conducted at least once every six months. The RBI said this constituted non-compliance with the applicable KYC guidelines.
The regulator clarified that the penalties imposed on both entities were based solely on deficiencies in regulatory compliance identified during the supervisory process. It added that the actions should not be construed as expressing any opinion on the validity of transactions or contractual agreements entered into by either institution with their customers.
The latest enforcement actions form part of the RBI's ongoing supervisory framework aimed at strengthening regulatory compliance, customer protection and governance standards across banks and housing finance companies operating in India.
Source - PTI
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