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RBI Fines Federal Bank and Karur Vysya Bank ₹35.60 Lakh for Regulatory Violations.

Banking & Finance | Dated: 12 Feb 2025

In February 2025, the Reserve Bank of India (RBI) imposed monetary penalties totaling ₹35.60 lakh on Federal Bank Limited and Karur Vysya Bank Limited for non-compliance with specific regulatory directions.

🎯 Key Highlights:

- Federal Bank has been fined ₹27.30 lakh for failing to comply with RBI directions on interest rates of deposits. An inspection revealed that the bank had opened certain savings deposit accounts in the names of entities not eligible to hold such accounts.
- In February 2025, the Reserve Bank of India (RBI) levied monetary penalties totaling ₹35.60 lakh on Federal Bank Limited and Karur Vysya Bank Limited for failing to comply with specific regulatory directives.

💡 Other Important Facts:

(i) Federal Bank was fined ₹27.30 lakh for violating RBI guidelines on interest rates of deposits. An inspection found that the bank had opened savings deposit accounts for ineligible entities.
(ii) Karur Vysya Bank faced a ₹8.30 lakh penalty for non-compliance with RBI's loan system for bank credit delivery. The bank failed to maintain the required proportion of outstanding loan amounts in line with sanctioned working capital limits for certain borrowers.
(iii) The penalties were imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The RBI carried out statutory inspections and compliance reviews before taking action against both banks.

📚 Test Your Knowledge:

Recently, RBI imposed a total penalty of how much amount on Federal Bank and Karur Vysya Bank for regulatory non-compliance?

Correct Answer: ₹35.60 Lakh

🚀 Quick Recap:

About Karur Vysya Bank Limited

MD & CEO : Ramesh Babu
Headquarters : Karur, Tamil Nadu(TN)