Why RBI has imposed ₹41.8L fine on Canara Bank
What's the story
The Reserve Bank of India (RBI) has imposed a penalty of ₹41.8 lakh on Canara Bank for violating Know Your Customer (KYC) norms and account classification errors. The penalty was imposed after a supervisory evaluation of the bank's financial position as of March 31, 2025. The RBI found that Canara Bank failed to upload KYC records of some customers to the Central KYC Records Registry (CKYCR) within the stipulated time frame.
Account issues
Penalty not a comment on transaction validity: RBI
The RBI also observed that Canara Bank wrongly classified some accounts as inoperative, even when the last customer-initiated transaction was less than a year old in those accounts. This further added to the regulatory compliance deficiencies that led to the hefty fine. The central bank clarified that these penalties are not a comment on the validity of any transaction or agreement between these entities and their customers.
Additional penalty
Puran Associates penalized for non-compliance
Along with Canara Bank, Puran Associates Pvt Ltd has also been penalized by the RBI. The company was fined ₹3.1 lakh for not complying with certain provisions of the central bank's directions on asset classification. Like in the case of Canara Bank, this penalty is also based on regulatory compliance deficiencies and does not comment on any transaction or agreement validity between entities and their customers.