TestCloud
Prep • Practice • Perform
Log In

RBI Fines Indian Bank, IOB, and Mahindra & Mahindra Financial Services.

Banking & Finance | Dated: 29 Apr 2025

In April 2025, the Reserve Bank of India (RBI) imposed penalties on three financial institutions: Indian Bank (Chennai, Tamil Nadu), Indian Overseas Bank (IOB) (Chennai), and Mahindra & Mahindra Financial Services Ltd (MMFSL) (Mumbai, Maharashtra) for various regulatory non-compliances.

🎯 Key Highlights:

  • - Indian Bank was fined Rs. 55 lakh for non-compliance with RBI directions on 'Interest Rate on Advances', 'Kissan Credit Card (KCC) Scheme', and 'Lending to Micro, Small, and Medium Enterprises (MSME) Sector. The penalty was imposed for violating provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act (BR Act), 1949.
  • - Indian Overseas Bank (IOB) faced a penalty of Rs. 2.2 crore for non-compliance with RBI directions related to 'Credit Flow to Agriculture - Collateral Free Agricultural Loans' and 'Lending to Micro, Small, and Medium Enterprises (MSME) Sector.
  • - This penalty was imposed under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.

💡 Other Important Facts:

  • (i) Mahindra & Mahindra Financial Services Ltd (MMFSL) was fined Rs. 6.77 crore for non-compliance with certain provisions of the 'Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016' and Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.
  • (ii) The penalty was imposed under Clause (b) of Sub-section (1) of Section 58G read with Clause (aa) of Sub-section (5) of Section 588 of the Reserve Bank of India Act, 1934.

📚 Test Your Knowledge:

Which of the following banks faced a penalty for non-compliance with RBI’s directions related to 'Interest Rate on Advances' and 'Kissan Credit Card (KCC) Scheme'?

Correct Answer: Indian Bank

🚀 Quick Recap: