RBI slams banks for poor compliance

M K Jain, Deputy Governor of RBI, slammed banks for poor compliance with regulations, and pointed out that high value frauds and fines are a result of their lackadaisical attitude on this.

He said in some cases, the lack of compliance has been “recurring”, wherein banks have also ignored RBI’s instructions to commit the same mistakes time and again.

“Despite the benefits offered for good compliance culture and the cost of poor conduct, the compliance culture at banks is far from satisfactory,” Jain said speaking at the annual industry conference Fibac.

“During the process of supervisions, the Reserve Bank has observed various lacunae in the compliance culture. Some weaknesses and irregularities observed have been recurring in spite of the commitments to the Reserve Bank,” he added. Jain said he expects banks to make “serious efforts” on the compliance side, and look at the aspect beyond a regulatory mandate.