Canara Bank Fined Rs 41.80 Lakh by RBI Over KYC Compliance Violations | Biz Flow Kit
Canara Bank Fined Rs 41.80 Lakh by RBI Over KYC Compliance Violations
On June 05, 2026, the Reserve Bank of India (RBI) had imposed a monetary penalty amounting to Rs 41.80 lakh on Canara Bank over non-adherence with certain directions issued by it concerning ‘Know Your Customer (KYC)’ and ‘Unclaimed Deposits/Inoperative Accounts in Banks’.
The RBI had levied the aforesaid penalty in exercise of its powers granted under provisions of section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. This action was taken after a statutory inspection for Supervisory Evaluation (ISE 2025) of the Canara Bank, conducted by the RBI, in accordance with the bank’s financial position as of March 31, 2025.
Based on the findings of the inspection conducted, the RBI issued a show cause notice (SCN) to the Canara Bank proposing a penalty amounting to Rs 41.80 lakh, asking the bank to explain why the proposed action should not be taken against it.
In response to the notice, the Canara Bank filed a detailed reply and also furnished relevant submissions during the scheduled personal hearing. However, the RBI did not find the reply and submissions appropriate and hence concluded to confirm the Rs 41.80 lakh penalty. The following charges on Canra Bank have been confirmed.
- “i) The bank did not upload KYC records of certain customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline.
- ii) The bank classified certain accounts as inoperative, despite the last customer-induced transaction being less than one year old in such accounts.”
Now, Canara Bank has disclosed the same penal action taken by RBI before the stock exchanges (National Stock Exchange of India Limited and Bombay Stock Exchange Limited). The company had received the RBI’s penalty order imposing the penalty of Rs 4,180,000 under section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the BR Act on June 05, 2026.
The bank has made this disclosure through an intimation dated June 05, 2026, under Regulation 30 of the Securities and Exchange Board of India (LODR) Regulations, 2015. The bank has clarified that the present action does not impact its financial, operational, or other activities.
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