RBI has imposed a fine of Rs 41.8 lakh on Canara Bank for not following KYC rules and provisions related to inoperative accounts. The central bank clarified that this action has been taken only on the basis of regulatory deficiencies.
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The Reserve Bank of India (RBI) has imposed a fine of ₹4.18 million on public sector Canara Bank. The central bank took this action for non-compliance with KYC (Know Your Customer) and inoperative accounts regulations. In a statement issued on Friday, the RBI said the penalty was imposed based on deficiencies observed in regulatory provisions.
Several deficiencies revealed during the inspection
The RBI conducted an inspection of Canara Bank based on its financial position as of March 2025 (ISE 2025). During the inspection, it was found that the bank had not uploaded the KYC records of some customers to the Central KYC Records Registry (CKYCR) within the stipulated timeframe.
The KYC process is a vital part of the banking system, through which customer identification and financial activities are monitored. The RBI takes any negligence in this process seriously.
Mistakes in Classifying Inoperative Accounts
During the inspection, the RBI also found that the bank had declared some accounts inoperative even though the last transaction by customers in those accounts had been less than a year ago. This was considered inconsistent with RBI guidelines. Experts believe that such mistakes can cause inconvenience to customers and impact banking services.
Fine Imposed on Another Company
The RBI also imposed a fine of ₹3.1 lakh on Purana Associates Private Limited. The company is accused of not complying with RBI guidelines related to asset classification.
Customers need not panic
The central bank clarified that these fines were imposed only based on violations of regulatory rules. This does not imply that the validity of any transactions or agreements between the entities concerned and their customers has been questioned. RBI said that its objective is to ensure better compliance of regulations in banks and financial institutions, so that the banking system remains more transparent, safe and reliable.
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