New Delhi: The Reserve Bank of India (RBI) has imposed a penalty of ₹63.60 lakh on Bank of Baroda for violating regulatory rules related to the Fair Practices Code for Lenders and Know Your Customer (KYC) guidelines.
The central bank announced the penalty in a statement issued on Friday. The action was taken under the provisions of the Banking Regulation Act, 1949, through an order dated June 30, 2026.
Inspection found two major violations
According to the RBI, the penalty follows irregularities found during the Inspection for Supervisory Evaluation (ISE 2025), which reviewed the bank’s financial position as of March 31, 2025.
After the inspection, the RBI issued a show-cause notice to the bank. It examined the bank’s written reply, additional explanations, and submissions made during a personal hearing before reaching its final decision.
The RBI found two charges to be valid.
Higher interest and delayed KYC updates
The central bank said the bank charged interest rates higher than the contracted rate in some loan accounts.
It also found that the bank failed to upload the KYC records of some customers to the Central KYC Records Registry (CKYCR) within the required time limit. This was a violation of RBI’s regulatory instructions.
However, the RBI clarified that the penalty is based only on deficiencies in regulatory compliance. It does not question the validity of any transaction or agreement between the bank and its customers.
GIC Housing Finance also penalised
The RBI also imposed a ₹3.10 lakh penalty on GIC Housing Finance Limited for not complying with certain provisions of its KYC guidelines.
The action was taken under Section 52A of the National Housing Bank Act, 1987, which gives the RBI the authority to penalise housing finance companies for regulatory violations.
The central bank said strict compliance with KYC rules is essential to maintain transparency, strengthen the financial system, and prevent misuse of financial services.
