The Reserve Bank of India (RBI) recently imposed penalties amounting to a total of Rs 10.34 crore on Citibank, Bank of Baroda, and Indian Overseas Bank (IOB) for various breaches of regulatory norms.

Citibank faced the highest penalty of Rs 5 crore due to non-compliance with regulations regarding the depositor education and awareness fund scheme, along with issues related to the code of conduct on outsourcing financial services. Bank of Baroda, a state-owned bank, was fined Rs 4.34 crore for contravention of specific directives linked to establishing a central repository of large common exposures, among other violations. Furthermore, Chennai-based public sector lender Indian Overseas Bank was penalized Rs 1 crore for failing to adhere to guidelines concerning loans and advances.


It’s important to note that these penalties do not call into question the validity of any transactions or agreements that the banks have with their customers. The RBI clarified that these penalties are solely based on the shortcomings observed in regulatory compliance.

For Citibank, the penalties were linked to the failure to comply with norms related to the depositor education and awareness fund scheme. This scheme is designed to educate depositors about various banking regulations, the rights they possess as depositors, and general awareness about safe banking practices. Additionally, Citibank’s non-adherence to the code of conduct on outsourcing financial services signifies a breach in the guidelines set by the RBI to ensure responsible and secure outsourcing practices in the financial sector.


Bank of Baroda faced penalties for violating certain directives regarding the establishment of a central repository of large common exposures. This particular directive aims to monitor and mitigate risks associated with large exposures that the bank might have, ensuring better risk management practices.

Indian Overseas Bank, headquartered in Chennai, was penalized for not adhering to guidelines concerning loans and advances. The RBI imposes such penalties to ensure that banks comply with regulations related to lending practices, which are essential for maintaining a stable financial system.

Overall, these penalties serve as a reminder to banks about the importance of strict compliance with RBI regulations. They are meant to encourage banks to review their practices and ensure they align with regulatory guidelines, ultimately safeguarding the interests of depositors and maintaining the stability of the financial system in the country.