RBI Imposes Rs 41.8 Lakh Penalty On Canara Bank For KYC Norm Violations

New Delhi, Jun 8 (KNN) The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 41.8 lakh on Canara Bank for non-compliance with certain regulatory directions, including Know Your Customer (KYC) norms.
 
RBI Imposes Penalty Following Supervisory Review
 
According to the RBI, the action follows deficiencies observed during a supervisory evaluation of the bank's financial position and operations as of March 31, 2025.
 
The central bank found that Canara Bank had failed to upload KYC records of certain customers to the Central KYC Records Registry (CKYCR) within the prescribed timelines. 
 
Banks are required to update customer KYC information on the central registry within stipulated timeframes to strengthen customer identification and reduce the risk of fraud.
 
Inoperative Account Classification Also Flagged
 
The RBI also observed that the bank had classified certain customer accounts as inoperative even though less than one year had elapsed since the last customer-induced transaction in those accounts. Under existing regulatory guidelines, such accounts should continue to be treated as active.
 
Following the supervisory findings, the RBI issued a show-cause notice to the bank seeking an explanation. After examining the bank's written submissions and oral representations, the central bank concluded that the regulatory violations warranted the imposition of a penalty.
 
Penalty Does Not Affect Customers Or Operations
 
The RBI clarified that the action is based solely on deficiencies in regulatory compliance and does not affect the validity of any transactions or agreements entered into by the bank with its customers.
 
The central bank further stated that the penalty will have no impact on the bank's normal operations or on customer deposits and services.
 
(KNN Bureau)