RBI Imposes ₹61.40 Lakh Penalty on Bank of Baroda for Non-Compliance with Deposit and Incentive Guidelines
Reserve Bank of India has fined Bank of Baroda ₹61.40 lakh for violating key norms on interest payments and staff incentives, following its 2023 supervisory inspection.
Author: Kalyani Mali
Published: May 7, 2025
In a press release dated May 2, 2025, the Reserve Bank of India (RBI) announced a monetary penalty of ₹61.40 lakh on Bank of Baroda (BoB). The enforcement action follows regulatory lapses found during RBI’s Inspection for Supervisory Evaluation (ISE) conducted for FY23.
RBI Flags Lapses in Interest Credit and Staff Incentives
The RBI has imposed a monetary penalty of ₹61.40 lakh on BoB for non-compliance with RBI's directives on customer service and interest rate payment.
RBI identified two critical lapses: staff received non-cash incentives for selling insurance products under the corporate agency model, and interest was not credited at mandated intervals to inoperative or dormant accounts. These issues persisted despite the bank being given an opportunity to respond during a hearing.
Image: RBI press release, announcing a ₹61.40 lakh penalty on Bank of Baroda.
Courtesy: WeBankers
Internal Governance Challenges at Bank of Baroda
This action adds to broader concerns about Bank of Baroda’s internal practices. Over the past year, several RTI-based investigations and reports have spotlighted issues in the bank’s promotion process and employee dissatisfaction, which includes:
RTI Filed Seeking Clarity on BoB Promotions
Staff Concerns Over Promotion Delays
Ex-AGM’s Legal Fight Over Promotions
Promotion Review Prompted by RTI Responses
How Twitter Users Are Reacting to BoB’s Issues
Recent developments at Bank of Baroda have sparked a wave of responses on Twitter, with users voicing their opinions on the bank’s internal practices.
Image: Screenshot of tweets expressing concerns about Bank of Baroda’s internal practices and employee dissatisfaction.
The RBI’s penalty against Bank of Baroda underscores the critical need for strict adherence to regulatory norms and stronger internal governance. As the bank addresses these compliance issues, maintaining transparency and restoring stakeholder confidence will be essential moving forward.
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