RBI’s Action on Banks For Levying Penalty Without Informing Customers

RBI’s Action on Banks For Levying Penalty Without Informing Customers

Has your bank ever sent you an SMS for not maintaining the minimum balance? If yes, then your bank is doing the right thing. 

But, a few banks recently debited their customer’s accounts without informing them about the minimum balance threshold. This is against the rule. 

When RBI learnt about this, do you know what happened? It imposed a hefty penalty on the bank that missed to inform their customers. 

Apart from this, RBI actively keeps a check on every bank and takes action for non-compliance with norms. 

What’s Happening?

RBI has imposed a fine of Rs 50 lakh on Maharashtra’s Jalgaon People’s Co-operative Bank for non-compliance with norms. 

What did this bank do?

This co-operative bank had not classified certain accounts as Non-Performing Assets (NPA) as per RBI’s norms. Also, a penalty for not maintaining a minimum balance was deducted from several bank accounts without informing customers about the same. 

RBI has also imposed a fine of Rs 5 lakh on Andaman and Nicobar State Co-operative Bank Ltd for violating norms. According to RBI, Andaman and Nicobar State Co-operative Bank has sanctioned unsecured loans to its directors. Hence action has been taken against the bank.

On 23rd September 2022, the central bank also imposed a fine of Rs 3 lakh on Haryana’s Hisar Urban Co-operative Bank for violating rules.

Did you know?

If you come across any bank practice that is against RBI’s norms, you can report it, too, as there are various rights you have as a bank’s customer.

Right of a Bank’s Customer

  • Right to Transparency and Honesty

Any contract, agreement, or action the bank takes should be transparent and easily understood by the customers. The customers should be fully aware of the terms and conditions.

  • Right to Right Treatment

The bank must treat its customers properly. The customer cannot be discriminated against based on gender, age, religion, caste or physical ability.

  • Right to Privacy

The bank cannot make the personal information of a customer public without his/her consent. Banks can make private information public only if the law requires it.

Where and How to Complain?

If you face any issues, you can lodge an online complaint with the bank by submitting an online application or a hard copy. If the bank does not resolve the issue in a month, you can take the complaint further to the Banking Ombudsman of RBI.

You can find the address and contact details of the offices of the Banking Ombudsman by visiting the RBI’s website. Apart from this, you can raise your issue online by visiting the website (https://rbi.org.in/Scripts/Complaints.aspx ).

Consumers can also write to the Consumer Affairs Helpline at consumer helpline.gov.in.   

That’s it for today. We hope you found this newsletter helpful. Don’t forget to share it with your friends.

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