The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹63.60 lakh on state-owned lender Bank of Baroda for failing to comply with key regulatory directions.

The enforcement action follows a statutory inspection for supervisory evaluation (ISE 2025) assessing the bank’s financial position as of March 31, 2025.

1. Core Compliance Violations

The central bank’s investigation revealed two primary areas of non-compliance:

  • Excess Interest Collections: The public sector lender was found to have collected interest rates from certain loan accounts that were higher than the contractually agreed-upon rates, directly violating provisions under the Fair Practices Code for Lenders.
  • KYC Processing Delays: The bank failed to upload Know Your Customer (KYC) records of several customers to the Central KYC Records Registry (CKYCR) within the government-prescribed timelines.

2. Accompanying Penalties

Alongside the action against Bank of Baroda, the RBI also penalized GIC Housing Finance Limited to the tune of ₹3.1 lakh. The housing finance firm was flagged by the National Housing Bank (NHB) for failing to implement a mandatory periodic review system to evaluate the risk categorization of customer accounts at least once every six months.

The RBI explicitly stated that both monetary penalties are rooted strictly in administrative and regulatory compliance deficiencies, and do not impact the underlying validity of any existing commercial transactions or contracts held with everyday bank consumers.

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