The Reserve Bank of India (RBI) has once again made it clear that laxity in banking rules will not be tolerated at any cost. Taking a tough stance, the Central Bank has imposed a fine of lakhs of rupees on three big public sector banks of the country and the famous fintech company ‘Pine Labs’. This action of RBI has created a stir in the banking world, while it is also a big update for common customers.

These banks will be punished, they will have to pay huge amount

RBI has decided the amount of fine depending on the seriousness of the violation of rules. In this, most of the blame has fallen on Union Bank. Check out the full list here:

• Union Bank of India: Rs 95.40 lakh


• Central Bank of India: Rs 63.60 lakh


• Bank of India: Rs 58.50 lakh


• Pine Labs: Rs 3.10 lakh

Where did the mistake happen in Union Bank?

RBI investigation revealed that Union Bank of India was slow in customer service and resolution of complaints. The bank did not deposit the money of unauthorized electronic transactions (Fraud Transactions) in the customers’ accounts within the stipulated 10 working days. Apart from this, the bank also did not provide 24-hour fraud reporting facility to the customers. Not only this, “manual” tampering was found in the data of Kisan Credit Card (KCC) accounts, raising questions on the transparency of the loan system.

Negligence of Central Bank and Bank of India

Central Bank of India has been fined Rs 63.60 lakh for not uploading KYC records on time and opening duplicate Basic Savings Accounts (BSBD) in the name of the same customer.

At the same time, a fine of Rs 58.50 lakh was imposed on Bank of India because it collected service and processing charges from small farmers and entrepreneurs against the rules. Also, the bank did not pass interest to the customers for the period between Fixed Deposit (TDR) maturity and payment, which was a direct loss to the customers.

Action against Pine Labs also

Even ‘Pine Labs’, a big name in the world of digital payments, could not escape the eyes of RBI. The company had issued prepaid wallets to customers without doing “full KYC”. This action has been taken considering that issuing wallets without identity verification increases the risk of fraud and money laundering.

What does this mean for customers?

If your account is in these banks, then there is no need to panic. RBI has clarified that this penalty is on the functioning and shortcomings of the banks and not on your deposited money. Your money and interest are completely safe. On the contrary, this action will only benefit customers. Now banks will hear your complaints quickly, money for unauthorized transactions will be returned on time and processes like KYC will be more transparent. This strict message from RBI shows that now ignoring the interests of customers is going to be very costly for the banks.