The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 58.50 lakh on Bank of India for non-compliance with regulatory guidelines related to Priority Sector Lending (PSL) and interest payment on deposits.

The penalty, issued through an order dated March 23, 2026, follows violations of RBI directions on PSL targets and classification, as well as interest rates on deposits.

The action is based on findings from the RBI’s Statutory Inspection for Supervisory Evaluation conducted with reference to the bank’s financial position as of March 31, 2025. After reviewing the bank’s responses and submissions, the RBI identified key lapses, including the collection of ad-hoc charges in certain small-ticket priority sector loan accounts and failure to pay interest on some term deposits from maturity until repayment.

The RBI clarified that the penalty is due to regulatory deficiencies and does not affect the validity of any transactions or agreements entered into by the bank. It also noted that the action is without prejudice to any further measures that may be initiated against the bank.