RBI fines PNB, Federal Bank, Mercedes Financial Services for breach of rules

Mumbai: The Reserve Bank of India (RBI) said on Friday that it has imposed monetary penalties on Punjab National Bank, Federal Bank, Mercedes-Benz Financial Services India and Kosamattam Finance for violating the central bank's norms.

A fine of Rs 72 lakh on Punjab National Bank, Rs 30 lakh on Federal Bank, Rs 13.38 lakh on Kosamattam Finance, and Rs 10 lakh on Mercedes-Benz Financial Services, according to an RBI statement.

Punjab National Bank has been fined for violations that include levying SMS charges on certain accounts despite maintaining invalid mobile numbers in the Core Banking Solution, not strictly adhering to interest rates as per the pre-disclosed schedule in several term deposit accounts, and failing to specify the interest reset date in MCLR-linked loans.

Federal Bank was penalized for issuing demand drafts of Rs 50,000 and above, without including the name of the purchaser on the drafts.

Kosamattam Finance was penalized for not maintaining a loan-to-value ratio of 75 per cent in certain loan accounts.

Mercedes-Benz Financial Services India has been fined for not carrying out due diligence of its customers and for not updating the Know Your Customer (KYC) information of its high-risk customers.