RBI in action: Reserve Bank of India imposed Rs 29.6 lakh fine on this bank for breaking rules, know the reason

RBI in action: Reserve Bank of India imposed Rs 29.6 lakh fine on this bank for breaking rules, know the reason

New Delhi: Reserve Bank of India (RBI) has imposed a monetary penalty of ₹29.6 lakh on Fino Payments Bank for breaking the rules of the Payments Bank License. The action is taken after a detailed inspection conducted during the Statutory Inspection for Supervisory Evaluation (ISE) 2024, which assessed the bank’s operations as of March 31, 2024.

According to RBI, the bank repeatedly breached the prescribed end-of-day balance limit in certain customer accounts which is a clear violation of the payments bank regulations. Payment banks are required to have capping on customer balances to mitigate risk and ensure financial discipline.

After identifying the irregularities, RBI (Reserve Bank of India) issued a show cause notice to Fino Payments Bank, asking them to explain why a penalty should not be charged for these lapses.

Although Fino Payments Bank has given a written reply to the RBI, as reported by ET. However, after reviewing everything, the RBI concluded that the bank had indeed broken the rules.

In its official statement, RBI said, “The bank breached the regulatory ceiling of end-of-day balance, as applicable for a payments bank, in certain accounts on several occasions.”

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The penalty has been imposed against Fino Payments Bank under the provisions of the Banking Regulation Act, 1949, and acts as a reminder to all banks & financial institutions to strictly adhere to the guidelines set by Reserve Bank of India.