RBI Fines Bank of India Due to Non-Compliance with Regulatory Directives Regarding Priority Sector Lending
The Reserve Bank of India (RBI) has fined the Bank of India Rs 58.5 lakh for not following its important directions regarding priority sector lending.
An inspection of the bank’s financial records for the year ending March 31, 2025, revealed that it did not fully follow guidelines on ‘Priority Sector Lending (PSL) – Targets and Classification‘ and ‘Interest Rate on Deposits‘.
One major issue was that the bank collected certain charges on some priority sector loans with sanctioned amounts up to Rs 25,000. These charges included service charges, inspection charges, and processing charges.
Another violation was related to non-payment of interest. The bank failed to pay the required interest on some Term Deposit Receipts (TDRs) from the maturity date until the date of payment.
RBI had earlier sent a notice to the bank asking for an explanation. After considering the bank’s response and hearing its side, RBI concluded that these two allegations were sustained. As a result, the regulator imposed a penalty of Rs 58.50 lakh.
RBI clarified that this fine is only for rule violations and does not affect customer agreements.
