The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹131.80 lakh on Punjab National Bank (PNB) for non-compliance with its directions issued on ‘Loans and Advances’ and ‘Know Your Customer (KYC)’.

Based on supervisory findings of non-compliance with its directions (after Statutory Inspection for Supervisory Evaluation with reference to PNB’s financial position as on March 31, 2022) and related correspondence in that regard, RBI said a notice was issued to the bank advising it to show-cause as to why penalty should not be imposed on it for its failure to comply with the directions.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty, the central bank said in a statement.

RBI noted that the public sector bank (i) sanctioned working capital demand loans to two State government owned Corporations against amounts receivable from government by way of subsidies/refunds/reimbursements, and (ii) failed to preserve the records pertaining to the identification of customers and their addresses obtained during the course of business relationship in certain accounts.

The central bank said its action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers.

Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

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