RBI imposes monetary penalty on ESAF Small Finance Bank Limited

Case Brief

By an order dated January 05, 2024, RBI imposed a monetary penalty of Rs 29.55 lakh on ESAF Small Finance Bank Limited. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, following supervisory examination ISE 2022 and review of the Risk Assessment Report. RBI found that the bank did not comply with directions on ‘Customer Service in Banks’ because it allowed certain BSBD account holders to open savings bank deposit accounts and failed to close certain savings bank deposit accounts within thirty days of BSBD account opening. RBI stated that the action was based on deficiencies in regulatory compliance and was not intended to pronounce on the validity of any customer transaction or agreement.