The Reserve Bank of India imposed a monetary penalty of Rs 5 crore on which private sector bank for non compliance with its directions and regulatory guidelines?

Introduction / Context:
The Reserve Bank of India (RBI) is the central bank and financial regulator in India. One of its powers is to impose monetary penalties on banks that fail to comply with its directions, guidelines or licence conditions. Such penalties are often reported in financial news and can be asked as current affairs questions in banking exams. This question asks you to recall which bank was fined Rs 5 crore by the RBI for non compliance with regulatory directions.

Given Data / Assumptions:

• The amount of the penalty was Rs 5 crore.
• The penalty was imposed by the Reserve Bank of India.
• The question is about non compliance with RBI directions.
• The options list Karur Vysya Bank, HDFC Bank, Kotak Mahindra Bank and Yes Bank.

Concept / Approach:
To answer correctly, you must recall or have read the specific RBI press release or news reports discussing this penalty. Such questions test precise memory of figures and names, so guessing can be risky. In this case, RBI imposed a Rs 5 crore penalty on Karur Vysya Bank for non compliance with its directions on certain regulatory issues. The other banks listed have faced different regulatory actions at various times, but the figure and context in this question match Karur Vysya Bank.

Step-by-Step Solution:
Step 1: Recall the RBI announcement regarding a penalty of Rs 5 crore on a private sector bank. Step 2: Identify that this penalty was linked to non compliance with directions in areas such as income recognition, asset classification or other regulatory requirements. Step 3: Remember that the bank named in this particular case was Karur Vysya Bank, a private sector bank headquartered in Tamil Nadu. Step 4: Compare this with other well known penalties on HDFC Bank, Kotak Mahindra Bank and Yes Bank, which might involve different amounts or different time periods. Step 5: Since the figure of Rs 5 crore for non compliance matches Karur Vysya Bank, select this option.

Verification / Alternative check:
You can verify this by checking RBI press releases or financial news archives for the period when the penalty was reported. These official documents clearly mention the name of the bank, the amount of the penalty and the broad reason, such as non compliance with certain directions. Financial newspapers and exam oriented banking magazines also summarise such regulatory actions, confirming Karur Vysya Bank as the bank in question.

Why Other Options Are Wrong:
HDFC Bank, Kotak Mahindra Bank and Yes Bank have at times been subject to regulatory scrutiny or smaller penalties, but the specific combination of a Rs 5 crore penalty for particular non compliance issues is associated in exam material with Karur Vysya Bank. Choosing any of these banks would confuse different regulatory events or different fine amounts.

Therefore, even though the other banks are prominent names in the private sector, they do not fit the exact details provided in the question.

Common Pitfalls:
Because several banks may be penalised in the same year, students often mix up amounts and names, especially when they revise current affairs quickly. Another pitfall is assuming that the largest or most famous bank is more likely to be the answer. The safest method is to note key regulatory events with precise figures and periodically revise them from trusted sources.

Final Answer:
The Reserve Bank of India imposed the Rs 5 crore penalty on Karur Vysya Bank.