The Reserve Bank of India (RBI) has imposed a penalty of ₹31.80 Lakhs on Indian Overseas Bank (IOB) due to certain non-compliances. The penalty was levied after an inspection by RBI related to the Supervisory Evaluation (ISE 2024). IOB has taken steps to strengthen internal processes to prevent future recurrences. The impact is considered non-material.
Penalty Imposed by RBI
Indian Overseas Bank (IOB) has received a communication from the Reserve Bank of India (RBI) regarding a monetary penalty. The penalty, amounting to ₹31.80 Lakhs, was imposed on September 30, 2025.
Reason for the Penalty
The penalty stems from the Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted by RBI, referencing IOB’s financial position as of March 31, 2024. The penalty was imposed under provisions of Section 47A(1)(c) read with Section 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
Specific Non-Compliance
The non-compliance relates to the collection of loan-related charges in certain Priority Sector Lending (PSL) accounts. These accounts have sanctioned loan amounts up to ₹25,000.
Bank’s Response
IOB has taken preventive actions to further strengthen internal processes. This is aimed at preventing the recurrence of similar events in the future. The bank considers the impact of this regulatory action to be non-material to its present and future operations.
Source: BSE
