Reserve Bank of India (RBI) has taken major action against the private sector Karnataka Bank. According to the central bank, Karnataka Bank was violating many rules. Due to this, this private-sector bank has imposed a fine of more than Rs 59 lakh.
Karnataka Bank Will Have To Pay More Than Rs 59 Lakh
According to RBI information, this penalty was imposed on May 14, 2024. Karnataka Bank Limited has been ordered to pay Rs 59,10,000. According to the central bank, this bank was not following the interest rates, asset classification, and deposit advances guidelines properly. RBI has taken action against Karnataka Bank under the Banking Regulation Act 1949.
Accounts Were Opened In The Name Of Many Ineligible Companies
The central bank started the investigation based on Karnataka Bank’s financial results on March 31, 2022. It was revealed that the bank was not following many instructions properly.
After this, an RBI show cause notice was issued to the bank. In this, clarification was sought from the bank. After analyzing the reply received from the bank in response to this notice, the decision to impose a fine was taken. The bank had opened accounts in the names of many ineligible companies. Also, he could not renew and review some loan accounts within the stipulated time limit. Nor had the bank declared them as non-performing assets (NPA).
RBI’s Decision Will Not Affect Customers
RBI said that this action against Karnataka Bank will not affect the customers. Karnataka Bank is a private bank based in Mangaluru. It has 915 branches, 1188 ATMs and about 1.1 crore customers in 22 states and 2 union territories. The bank’s shares are listed on NSE and BSE.
