The Biz Reporter
SRINAGAR: The Reserve Bank of India (RBI) has imposed a penalty of Rs 99.30 lakh on Jammu and Kashmir Bank following statutory inspection findings that revealed lapses in grievance handling, customer communication, KYC verification, and the transfer of unclaimed deposits. The inspection, conducted for supervisory evaluation purposes, assessed the bank’s financial position as of March 2024.
According to Outlook Money, the central bank issued a notice seeking explanations from the bank after the inspection, and considered the bank’s written responses, additional submissions, and oral statements made during a personal hearing. The RBI’s order highlighted that these lapses relate to fundamental banking requirements, which must be consistently followed to ensure proper treatment of customers and adherence to regulatory norms.
The inspection found that certain complaints rejected by the bank’s internal mechanism were not escalated to the Internal Ombudsman, depriving customers of an essential internal review. Additionally, the bank failed to send final resolution letters to customers after closing complaints—letters that are intended to inform customers of their right to approach the Banking Ombudsman if dissatisfied.
The RBI also noted gaps in video-based customer identification, including the absence of face-verification technology for digital onboarding, and lapses in verifying financial information provided by customers. Such measures are critical for preventing impersonation, ensuring accurate customer profiling, and safeguarding accounts from misuse.
Another key concern was the delay in transferring eligible unclaimed deposits to the Depositor Education and Awareness Fund. Timely transfers are required to ensure proper accounting of dormant balances, and delays can affect reconciliation and compliance.
The RBI clarified that the penalty is limited to these non-compliances and does not affect customer transactions or agreements. It also noted that further supervisory action may follow if future reviews reveal additional vulnerabilities.
