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The Reserve Bank of India (RBI) has imposed a penalty of Rs 2.27 crore on private sector lender RBL Bank for not complying with the central banks’ norms on internal ombudsman scheme, fair practices code, credit card operations, managing risks and code of conduct in outsourcing of financial services, and recovery agents engaged.
In its statement, the central bank said that on examination of a report based on certain complaints pertaining to the period FY21 and FY22 received against the recovery agents engaged by the bank, it was found that the bank failed to communicate the decision of its internal ombudsman properly in certain cases; failed to ensure that the recovery agents engaged by it as a part of its debt collection effort did not resort to intimidation or harassment of any kind. Further, it failed to ensure that recovery agents engaged by the bank either directly or through recovery agencies had completed a training course for Direct Recovery Agents and obtained a certificate from Indian Institute of Banking & Finance (IIBF) before being onboarded. The bank even failed to ensure that pre-employment police verification was carried out for recovery agents engaged by it, and inform borrowers the details of the recovery agency, at the time of forwarding their cases to the recovery agency.
Consequently, after taking into account the banks’ submissions, the central bank decided to impose a penalty on the bank for not complying with the guidelines issued.
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