RBI Slaps Penalty on PNB for KYC and Loan-Related Violations

The Reserve Bank of India (RBI) has fined Punjab National Bank (PNB) Rs 1.31 crore for non-compliance with KYC and loan directives. Following a financial position inspection, PNB was found to have sanctioned improper loans and failed to keep customer identification records.

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.31 crore on Punjab National Bank (PNB) for non-compliance with specific guidelines related to Know Your Customer (KYC) procedures and the management of loans and advances.

The central bank conducted a statutory inspection of PNB's financial health as of March 31, 2022. During this process, PNB sanctioned working capital demand loans to two state government-owned corporations against receivables from the government such as subsidies, refunds, and reimbursements.

Additionally, the public sector bank failed to preserve customer identification documents and address records obtained during business relationships for certain accounts. The RBI clarified that the penalty reflects regulatory compliance deficiencies and does not question the validity of any specific transactions or agreements PNB entered with its customers.

(Disclaimer: With inputs from agencies.)