Adding more bite: A case for tougher RBI penalties for violations

The amounts lenders are fined for violations are too little and may not deter them

Penalties by Mint Road may need a relook; not a month goes by without some regulated entity (RE) or the other getting rapped. The ‘Report on Trend and Progress of Banking in India (FY22)’ by the Reserve Bank of India (RBI) has it that the major reasons for the imposition of penalties on REs were ­non-compliance with the guidelines on exposure and IRAC (income recognition and asset classification), fraud reporting, and cybersecurity. During this period, there were 189 instances of penalties being imposed involving Rs 65.32 crore, more than double the 61 and Rs 31.36 crore in FY21. The average