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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In fact, RBI cancels the license of those cooperative banks which do not have sufficient keys. All these banks could not guarantee repayment to the depositors. Due to which the license of these banks has been canceled for the safety of money.

Action taken on these banks in 2024

• Uravakonda Co-operative Town Bank Ltd., Andhra Pradesh
• Jai Prakash Narayan Nagari Sahakari Bank Ltd., Basmathnagar, Maharashtra
• The Mahabhairab Co-operative Urban Bank Ltd., Tezpur, Assam
• The City Co-operative Bank Limited, Mumbai, Maharashtra
• The Hiriyur Urban Co-operative Bank Ltd. Hiriyur, Karnataka
• Durga Co-operative Urban Bank Ltd., Vijayawada, Andhra Pradesh
• Purvanchal Co-operative Bank Ltd., Ghazipur, UP
• The Banaras Mercantile Co-operative Bank Ltd., Varanasi
• Shimsha Cooperative Bank Ltd, Maddur, Mandya, Karnataka
• Shri Mahalaxmi Mercantile Co-operative Bank Ltd., Dabhoi, Gujarat
• Sumerpur Mercantile Urban Co-operative Bank Ltd., Sumerpur, Pali Rajasthan

What will be the impact on the account holder?

Whenever RBI closes a bank, its impact on the account holders will be only as much as the amount deposited in their account. Those who have a deposit amount of up to Rs 5 lakh in their account can avail the loan through Deposit Insurance and Credit Guarantee Corporation.

There is a rule in India. If a bank closes down, you will get back your money up to Rs 5 lakh in that bank. This work is done by an organization called Deposit Insurance and Credit Guarantee Corporation. On the other hand, if you have more than Rs 5 lakh deposited in a bank and the bank closes down, you will not get that much money back. That means you may suffer a loss.

DICGC insures all types of bank accounts. Meaning, whether your account is a savings account, current account or any other type of account, if the bank closes down, you will get back up to Rs 5 lakh.

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The post Bank License Cancelled: RBI has cancelled licence of 11 co-operative banks in 2024 – Check List here first appeared on Rightsofemployees.com.

RBI Canceled Bank License: The Reserve Bank of India, taking major action against Rajasthan based Co-operative Bank, has canceled the license of the bank. This action has been taken on Sumerpur Mercantile Urban Co-operative Bank located in Pali, Rajasthan. Giving information about the action taken against the bank, the Reserve Bank said that Sumerpur Mercantile Urban Co-operative Bank was facing financial crisis for a long time.

According to RBI, this bank did not have adequate sources of income and capital. In such a situation, keeping in mind the interest of the customers, the Reserve Bank has decided to cancel the license of the bank. This action has been taken only after the request of the cooperative societies of Rajasthan.

What will happen to customers’ money?

After the license of Sumerpur Mercantile Urban Co-operative Bank is cancelled, the biggest question is what will happen to the customers’ money. On liquidation, every depositor will get the benefit of insurance on deposits up to Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the provisions of the DICG Act, 1961. The Reserve Bank has made it clear that 99.13 percent of the bank’s depositors will get the benefit of DICGC deposits.

RBI took strict action against these banks including SBI

Recently, the Reserve Bank has taken major action and imposed a fine of crores on three banks including the country’s largest government bank State Bank of India. Along with SBI, the names of Canara Bank and City Union Bank are also included in this.

Due to violation of rules, the regulator has imposed a total fine of more than Rs 3 crore on all the banks. A penalty of more than Rs 2 crore has been imposed on SBI. A fine of Rs 32.30 lakh has been imposed on Canara Bank and Rs 66 lakh on City Union Bank.

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Bharathu Investment and Finance India, Cox & Kings Financial Services and PSPR Enterprises have been hit by RBI’s strictness. Along with this, 9 NBFCs and housing companies have surrendered their licenses.

These NBFCs and housing companies surrendered their licenses.

The Reserve Bank has informed that 9 NBFCs and one housing finance company have surrendered their licenses. Reliance Home Finance Limited is also included in these. The company has decided to return the license after exiting the housing finance institution business.

Among the nine NBFCs that have surrendered their licenses, Smile Microfinance, JFC Impex, Kaveri Tradefin and Ginni Tradefin have gone out of business. Apart from this, JG Trading and Investment, SK Finserv, Microfirm Capital, Bohra & Company and Mahico Grow Finance Private Limited surrendered their licenses. All these companies have given different reasons.

Number of NBFCs reduced from 200 to 26

According to RBI, the rules were not being followed properly in these NBFCs. This cannot be tolerated. The central bank said that NBFCs are formed to fulfill certain economic objectives. It is unnatural for them to demand to become like banks. RBI is not in favor of allowing more number of NBFCs to accept deposits. This is the reason why not a single new license has been given. Also, the number of NBFCs accepting deposits has reduced from 200 to only 26.

Regulatory changes coming in the financial sector

These decisions of RBI clearly show that regulatory changes are coming in the financial sector. RBI is in no mood to tolerate the loophole. This is the reason why many companies have surrendered their licenses. These steps of the central bank are to follow the regulatory rules responsibly and keep the financial system healthy and stable by making finance companies accountable.

The post RBI Action: 3 NBFCs were banned due to strictness of RBI, 9 surrendered their licenses. first appeared on Rightsofemployees.com.

I along with every member of the Paytm team salute you for your tireless support. There is a solution to every challenge and we are sincerely committed to serve our nation in full compliance.

Expressing confidence in India’s continued progress in the digital finance sector, he said, ‘India will continue to receive global praise in payments innovation and inclusion in financial services – PaytmKaro will be its biggest champion.’ Let us tell you that RBI has issued a notice on January 31, stopping Paytm Payments Bank from providing banking services after February 29.

Agreement will be made with some other bank

The central bank cited compliance issues but did not disclose the reason for taking strict punitive action against Paytm. At the same time, the company has assured the users that all the services related to Paytm Payments Bank will be provided by some other bank. Thus, he has said that Paytm services will not be disrupted from March 1.

Paytm said, ‘From now on, will work only with other banks, not with Paytm Payments Bank. We are overwhelmed with the support we have received from the big banks of the country.

The post RBI Action : Users should not worry! Paytm will continue to operate as before even after 29th February, read- latest update first appeared on Rightsofemployees.com.