RBI imposes monetary penalty on The Nainital Bank Limited

Case Brief

By order dated February 12, 2025, RBI imposed a monetary penalty of ₹61.40 lakh on The Nainital Bank Limited after supervisory inspection findings showed non-compliance with RBI directions on ‘Interest Rate on Advances’ and ‘Customer Service in Banks’. The bank was found to have failed to benchmark certain floating-rate MSME loans to an external benchmark rate and to have levied penal charges for non-maintenance of minimum balance in savings accounts at flat rates rather than proportionate to the shortfall. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.