RBI imposed Rs 41.80 lakh penalty on Bandhan Bank through order dated April 21, 2026, for violations identified during statutory inspection as on March 31, 2025. Penalty comprises Rs 31.80 lakh for Banking Regulation Act Section 20(1)(b)(iii) contravention and Rs 10.00 lakh for KYC compliance failures regarding periodic review of risk categorization. Bank disclosed on April 24, 2026, stating no material impact on operations.

This penalty reflects RBI's supervisory enforcement mechanism under Section 47A(1)(c) read with Section 46(4)(i) of Banking Regulation Act, 1949. The dual violation pattern—sectoral lending norms and KYC periodic review failures—indicates systematic compliance gaps at Bandhan Bank. Section 20(1)(b)(iii) violations typically involve exposure norms or lending concentration limits, critical for maintaining banking stability. KYC periodic review failures suggest inadequate risk categorization processes, potentially exposing the bank to money laundering risks. The penalty amount, while modest for a scheduled commercial bank, signals RBI's zero-tolerance approach to compliance lapses. For RBI Grade B candidates, this demonstrates regulatory supervision in action—how central bank uses monetary penalties as corrective tools. The timeline from inspection (March 2025) to order (April 2026) shows regulatory due process. Bandhan Bank's prompt SEBI disclosure under Regulation 30 of LODR reflects corporate governance requirements. Such penalties often trigger enhanced supervisory scrutiny, affecting future branch licensing and business expansion approvals.