The monetary penalties imposed by the Reserve Bank of India on regulated entities (REs) more than doubled to ₹86.11 crore in FY24 for contraventions/non-compliance with provisions of statutes and certain directions issued by the Reserve Bank from time to time.
The monetary penalties are part of RBI’s enforcement actions even as it plans to put in place a scale-based framework for enforcement action.
The central bank had slapped monetary penalties aggregating ₹40.39 crore in FY23.
In FY24, the central bank imposed monetary penalties on 281 REs (public sector banks, pivate sector banks, foreign banks, payments banks, small finance banks, regional rural banks, co-operative banks, NBFCs, CICs and HFCs) against 211 in FY23.
The central bank said the scale-based framework for enforcement action will be based on REs size, complexity, interconnectedness, range of activities and also the seriousness of violations. The draft scale-based enforcement framework is under finalisation, it added.
The Enforcement Department was set up with a view to separating enforcement action from supervisory process and to put in place a structured, rule-based approach to identify and process violations by the REs of the applicable policies and enforce the same consistently across the Reserve Bank.
The objective of enforcement is to ensure compliance by the REs with the rules and regulations, within the overarching principles of financial stability, public interest and consumer protection.