RBI imposes Rs 2.92 cr fine on Canara Bank for violation of various norms

The Reserve Bank of India on Friday said it has imposed a penalty of Rs 2.92 crore on Canara Bank for violation of various norms, including linking interest rates to external benchmark, and opening savings accounts of ineligible entities.

The Reserve Bank of India (RBI) conducted a statutory inspection for supervisory evaluation of the bank with reference to its financial position as on March 31, 2021.

"A scrutiny of the bank was carried out by RBI in July 2020 based on a high-value fraud reported by another bank," the central bank said in a statement.

After scrutiny, the RBI found that the bank failed to link interest on floating rate retail loans and loans to MSME to an external benchmark and also failed to link interest on floating rate rupee loans sanctioned and renewed during financial year 2020-21 to its Marginal Cost of Lending Rate (MCLR).

The public sector lender, the RBI said, opened several savings deposit accounts in the name of ineligible entities, registered dummy mob