Mumbai, March 19 : The Reserve Bank of India (RBI) has imposed a penalty of Rs 1.38 crore on Tamilnad Mercantile Bank Limited and a fine of Rs 63.6 lakh on DCB Bank Ltd. (the bank) for not complying with regulatory norms.

In the case of DCB Bank, the RBI inspection has revealed that the bank failed to reset the interest rates at the prescribed periodicity in certain MCLR-linked floating rate advances. Besides, it also failed to benchmark the interest rate of certain floating-rate retail loans and floating-rate loans to MSMEs to an external benchmark lending rate.

In the case of Tamilnad Mercantile Bank, the RBI found that the bank (i) failed to benchmark the interest rate on certain floating rate loans to MSMEs to an external benchmark lending rate; (ii) adopted multiple benchmarks within the same loan category; (iii) failed to price certain floating rate loans with reference to actual benchmark rate applicable to those loans and (iv) wrongly reported external rating of certain borrowers to CRILC.

However, at the same time, the RBI said that the action against the banks is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreements entered into by the bank with its customers.

/IANS