The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹41.80 lakh on Canara Bank for non-compliance with specific directions concerning Know Your Customer (KYC) norms and Unclaimed Deposits. The penalty, enforced under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949, follows the Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted with reference to the bank's financial position as on March 31, 2025. Canara Bank received the order on June 05, 2026, and disclosed that the action will have no impact on its financial, operational, or other activities.

The regulatory action stems from supervisory findings that identified lapses in the bank's compliance mechanisms. After considering the bank's reply to a show-cause notice, additional submissions, and oral submissions during a personal hearing, the RBI sustained specific charges. The central bank clarified that the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The inspection revealed two primary violations. The bank failed to upload KYC records of certain customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline. Additionally, the bank classified certain accounts as inoperative despite the last customer-induced transaction in those accounts being less than one year old.

The following table details the regulatory action:

The RBI noted that the imposition of the monetary penalty is without prejudice to any other action that may be initiated against the bank. The disclosure was submitted to the stock exchanges in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Canara Bank has approved a capital raising plan of ₹8,500 crore for FY27 through Basel III Compliant Additional Tier I and Tier II Bonds. The Board of Directors sanctioned the proposal during a meeting held on June 2, 2026, at the Head Office in Bengaluru. The fund raise aims to strengthen the bank's capital base and is subject to market conditions and necessary approvals.

Capital Raising Breakdown

The approved plan is divided into two specific tranches of debt instruments. The bank will raise ₹4,500 crore through Basel III Compliant Additional Tier I Bonds. Additionally, it will raise ₹4,000 crore via Basel III Compliant Tier II Bonds. Both issuances are scheduled for the financial year 2026-27.

Meeting Details

The Board meeting commenced at 03:00 P.M IST and concluded at 05:10 P.M IST. The decision was taken in accordance with Regulation 29 (1) & 50 (1) of SEBI (LODR) Regulations, 2015. The filing was submitted by Santosh Kumar Barik, Company Secretary.