In another strict regulatory action, the Reserve Bank of India has imposed monetary penalties on Bandhan Bank and Muthoot Housing Finance Company for non-compliance with regulatory norms.
The penalties relate to violations of Know Your Customer (KYC) guidelines and Fair Practice Code directions.
Penalty on Bandhan Bank
The Reserve Bank of India imposed a penalty of ₹41.8 lakh on Bandhan Bank.
Reasons for the Penalty
Bandhan Bank was found violating certain RBI directions, including:
- Failure to carry out periodic review of risk categorisation of certain accounts
- Sanctioning director-related loans in violation of norms
- Non-compliance with Know Your Customer (KYC) directions
The RBI clarified that the action is based on statutory and regulatory compliance deficiencies.
Penalty on Muthoot Housing Finance Company
The RBI also imposed a penalty of ₹80,000 on Muthoot Housing Finance Company.
Reason for the Penalty
The company was found non-compliant with RBI directions related to:
- Fair Practice Code norms
These norms ensure transparency and fair dealing with customers.
About Bandhan Bank
- Bandhan Bank is a Kolkata-based universal bank that started as a microfinance institution.
- Founded: August 23, 2015 (origin as NGO in 2001)
- Founder: Chandra Shekhar Ghosh
- Headquarters: Kolkata, West Bengal, India
- Chairman: Dr. Anup Kumar Sinha
- MD & CEO: Partha Pratim Sengupta
About Muthoot Housing Finance Company
- Muthoot Housing Finance Company Limited (MHFCL) is a subsidiary of Muthoot Fincorp Ltd.
- Parent Company: Muthoot Fincorp Ltd. (part of the Muthoot Pappachan Group)
- Headquarters: Kerala, India
- Industry: Housing Finance (NBFC – Non-Banking Financial Company)
Conclusion
The penalties imposed by the Reserve Bank of India on Bandhan Bank and Muthoot Housing Finance Company underline the central bank’s zero-tolerance approach toward compliance lapses. Such actions strengthen trust and discipline in India’s financial system.