RBI Imposes ₹54.78 Crore Penalty on 353 Regulated Entities in FY25

In a robust move to enforce regulatory compliance, the Reserve Bank of India (RBI) imposed 353 penalties worth ₹54.78 crore on various regulated entities (REs) during the financial year 2024–25. The enforcement actions targeted non-compliance with statutory provisions and RBI’s directives related to cybersecurity frameworks, exposure and IRAC norms, KYC norms, and reporting obligations to credit bureaus and fraud monitoring systems. This highlights the central bank’s growing emphasis on strengthening the financial ecosystem’s discipline and risk governance.

Why in News?

The RBI Annual Report for FY 2024–25, released on May 30, 2025, revealed that the RBI imposed 353 penalties totaling ₹54.78 crore. These were related to non-compliance with several critical frameworks and regulatory mandates across different banking and financial sectors.

Key Objectives of Enforcement Action

• Reinforce regulatory compliance among banks and NBFCs.
• Strengthen cybersecurity and risk management systems.
• Ensure accurate reporting of frauds, credit information, and borrower data.
• Improve customer due diligence under KYC norms.

Breakdown of Penalties by Category

Cooperative Banks

• 264 penalties
• Totaling ₹15.63 crore

Non-Banking Financial Companies (NBFCs) / Asset Reconstruction Companies (ARCs)

• 37 penalties
• Totaling ₹7.29 crore

Housing Finance Companies (HFCs)

• 13 penalties
• Totaling ₹0.83 crore (₹83 lakh)

Public Sector Banks (PSBs)

• 8 banks fined
• Total penalty: ₹11.11 crore

Private Sector Banks

• 15 banks fined
• Total penalty: ₹14.8 crore

Foreign Banks

• 6 banks fined (penalty amount not separately specified)

Types of Violations Noted

• Cybersecurity framework non-compliance
• Breach of exposure norms and Income Recognition and Asset Classification (IRAC) standards
• Lapses in Know Your Customer (KYC) compliance
• Incorrect/failure in fraud classification and reporting
• Inadequate or delayed submission of data to:
• CRILC (Central Repository of Information on Large Credits)
• Credit Information Companies (CICs)

Significance

• Indicates RBI’s shift from reactive supervision to proactive enforcement.
• Encourages financial institutions to adopt stronger internal compliance systems.
• Signals to the sector that regulatory leniency will not be tolerated.
• Enhances transparency and integrity in the Indian financial system.