meta_id 3218275

On June 5, 2026, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹41.80 lakh on Canara Bank for non-compliance with RBI directions on Know Your Customer (KYC) and Unclaimed Deposits/Inoperative Accounts in banks. The RBI exercised its enforcement powers under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. The penalty followed a Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted by the RBI with reference to the bank's financial position as of March 31, 2025. Following supervisory findings of non-compliance, the RBI issued a notice to Canara Bank requesting it to show cause why a penalty should not be imposed. After considering the bank's reply, additional submissions, and oral submissions during a personal hearing, the RBI sustained two primary charges: the bank failed to upload KYC records of certain customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline, and the bank incorrectly classified certain accounts as inoperative despite the last customer-induced transaction occurring less than one year prior. The RBI emphasised that this action addresses deficiencies in regulatory compliance and does not pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. The penalty is imposed without prejudice to any other enforcement action the RBI may initiate against Canara Bank. This enforcement action underscores the RBI's continued focus on ensuring banks maintain robust KYC procedures and accurate account classification practices in compliance with regulatory requirements.