RBI fines Bank of Baroda ₹64L for breaching regulatory guidelines
What's the story
The Reserve Bank of India (RBI) has slapped a hefty fine on Bank of Baroda and GIC Housing Finance for regulatory violations. The public sector lender has been fined ₹63.6 lakh for charging excess interest and delaying KYC record uploads. Meanwhile, GIC Housing Finance was penalized ₹3.1 lakh for not conducting timely risk reviews of accounts. These actions underline RBI's commitment to ensuring fair lending practices and customer identification protocols in the banking industry.
Inspection findings
Inspection revealed excess interest charges and KYC delays
The RBI conducted a statutory inspection of Bank of Baroda as part of its supervisory evaluation. The inspection, which was based on the bank's financial position as of March 31, 2025, revealed that the lender had charged interest higher than the contracted rate in some loan accounts. It also found that KYC records for some customers were not uploaded to the Central KYC Records Registry (CKYCR) within the stipulated time frame.
Risk review failure
GIC Housing Finance penalized for not conducting timely risk reviews
In a separate case, a statutory inspection of GIC Housing Finance's financial position as of March 31, 2025, was conducted by the National Housing Bank and also resulted in a notice being issued. The company was penalized for failing to implement a system of periodic risk categorization reviews for accounts at least once every six months.