The Reserve Bank of India (RBI) has imposed a fine of Rs 41.8 lakh on public sector Canara Bank. The central bank has taken this action due to not following the rules related to KYC (Know Your Customer) and Inoperative Accounts. RBI said in a statement issued on Friday that this penalty has been imposed on the basis of deficiencies found in the regulatory provisions.
Many flaws came to light during inspection
RBI had inspected Canara Bank (ISE 2025) on the basis of financial position till March 2025. During this time it was found that the bank did not upload the KYC records of some customers to the Central KYC Records Registry (CKYCR) within the stipulated time limit.
KYC process is an important part of the banking system, through which customer identity and financial activities are monitored. RBI takes negligence in this process seriously.
Mistake made in classification of inactive accounts also
During the inspection, RBI also found that the bank had declared some accounts inoperative, even though it had been less than a year since the last transaction made by the customers in those accounts. This was not considered to be in accordance with RBI guidelines. Experts believe that such mistakes can cause inconvenience to customers and affect banking services.
Another company also fined
Along with this, RBI has also imposed a fine of Rs 3.1 lakh on Purana Associates Private Limited. The company is accused of not following RBI instructions related to asset classification.
Customers need not worry
The central bank has made it clear that these fines have been imposed only on the basis of violation of regulatory rules. This does not mean that the validity of any transaction or agreement between the concerned entities and their customers has been questioned. RBI said that its objective is to ensure better compliance with the rules in banks and financial institutions, so that the banking system remains more transparent, secure and trustworthy.
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