RBI Imposes Rs.31.8 Lakh Penalty on Indian Overseas Bank for Non-Compliance with PSL Norms.
Banking & Finance
In September 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of Rs.31.8 lakh on Indian Overseas Bank (IOB) for its non-compliance with the central bank’s directions on ‘Priority Sector Lending (PSL) – Targets and Classification’.
Main Point :- (i) The penalty was imposed under Section 47A(1)(c), read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949, empowering RBI to take action against banks violating regulatory provisions.
(ii) The penalty followed the Statutory Inspection for Supervisory Evaluation (ISE 2024) of IOB, conducted by the RBI based on its financial position as of March 31, 2024.
(iii) RBI’s inspection revealed that IOB had charged fees on certain Priority Sector Lending (PSL) loans of up to Rs.25,000, which was in violation of the prescribed PSL norms.
About RBI
Governor : Sanjay Malhotra
Headquarter : Mumbai
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