RBI penalizes Canara Bank for KYC delays and account misclassification lapses

The Reserve Bank of India has issued a penalty against Canara Bank following its latest Statutory Inspection for Supervisory Evaluation. While the penalty amount is relatively small for a bank of Canara's size, the RBI's stated reasons highlight emerging regulatory priorities.

The two specific operational deficiencies cited were KYC delays and account misclassification. First, the bank failed to upload Know Your Customer records of certain customers to the Central KYC Records Registry within the mandated timeframe. Second, the bank improperly classified certain accounts as "inoperative" despite evidence that customers had conducted transactions in those accounts less than a year prior.