RBI Levies ₹44.7 Lakh Penalty on Bandhan Bank Over Compliance Issues

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹44.7 lakh on Bandhan Bank (NSE: BANDHANBNK) for deficiencies in statutory and regulatory compliance. The central bank clarified that the action was taken after identifying lapses during a supervisory evaluation.

Findings from RBI Inspection

A statutory inspection was conducted by RBI with reference to Bandhan Bank’s financial position as of March 31, 2024. The inspection revealed multiple instances of non-compliance with RBI directions. Following these findings, the bank was issued a show-cause notice, seeking an explanation for the lapses.

Nature of Non-Compliance

The RBI highlighted specific issues:

• Remuneration irregularities: Bandhan Bank had paid remuneration in the form of commission to certain employees, violating regulatory norms.
• Data handling lapses: The bank carried out manual interventions through the back-end in certain account data. Additionally, audit trails and user access logs were not adequately captured in the system.

Clarification from RBI

The RBI emphasised that the penalty is solely based on deficiencies in compliance and does not question the validity of any transactions or agreements entered into by Bandhan Bank with its customers.

Implications for Bandhan Bank

This regulatory action underscores the importance of robust internal controls and adherence to compliance standards. The penalty serves as a reminder for banks to maintain transparent systems, ensure accountability in employee remuneration, and strengthen IT audit mechanisms.

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Conclusion

The RBI’s action against Bandhan Bank highlights the central bank’s strict approach to ensuring compliance and transparency in the financial system. While the penalty does not affect customer transactions, it signals the need for stronger governance and internal checks at the bank.

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