RBI Imposes Penalties on CSB Bank, Bank of Maharashtra, DCB Bank and others for Non-Compliance

The Reserve Bank of India announced a series of monetary penalties on several banks and non-bank lenders on February 13, 2026, after introducing a draft framework aimed at preventing mis selling of financial products. 

Details of RBI Penalties on Banks 

CSB Bank received a penalty of ₹63.60 lakh for breaching directions on business correspondents and customer service.  

The Bank of Maharashtra was fined ₹32.50 lakh for failing to report self-help group member data to credit information companies and for not identifying beneficial owners in certain accounts.  

DCB Bank faced a penalty of ₹29.60 lakh for not maintaining the prescribed loan‑to‑value ratio on selected nonagricultural gold loan accounts. 

Penalties on Non-Bank Financial Entities 

IIFL Finance was charged ₹5.30 lakh for not classifying restructured accounts as non-performing assets as required under asset classification guidelines.  

Navi Finserv incurred a penalty of ₹3.80 lakh for contacting borrowers outside the permitted time window of 8:00 a.m. to 7:00 p.m. during recovery actions. 

Read More: RBI to Overhaul Lead Bank Scheme for Enhanced Effectiveness! 

Key Provisions of RBI’s New Draft on Mis Selling 

The draft defines mis selling as offering products that are unsuitable for a customer’s profile, providing incomplete or misleading information, selling without explicit consent, or forcing compulsory bundling of products.  

It also outlines the responsibilities of banks to obtain clear consent and to ensure that product recommendations match the risk appetite and financial situation of the customer. 

Conclusion 

The RBI’s actions demonstrate a stricter enforcement stance on regulatory compliance across banks and non-bank lenders. The penalties imposed on CSB Bank, Bank of Maharashtra, DCB Bank, IIFL Finance and Navi Finserv reflect the central bank’s focus on consumer protection and adherence to the new draft aimed at curbing mis selling. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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