Cracking the whip: banks could face higher fines for non-compliance

The government will consider imposing higher fines on banks for non-compliance with regulatory guidelines amid concerns that the current penalty amounts may not act as an effective deterrent for large organisations or repeat offenders. The Centre is open to reviewing the mechanism the regulator uses by amending the Banking Regulation (BR) Act, 1949, and the Reserve Bank of India Act, 1934, a senior government official said.

“The current fine amounts are low.

“We will discuss this matter with the regulator (RBI). We are open to the possibility of amending the relevant provisions,” the official said, requesting anonymity.

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