RBI imposes penalty on 14 banks for violation of norms

Share

The Reserve Bank of India (RBI) imposed monetary penalties – ranging between ₹ 50 lakh to ₹ 2 crore, on 14 banks including the State Bank of India (SBI), Punjab and Sind Bank, and Bandhan Bank, among others, for contravention of various regulatory norms, including on lending to non-banking financial companies or NBFCs. These 14 banks include private banks, public sector banks, co-operative banks, foreign banks, and also a small finance bank. (Also Read: Reserve Bank Of India Imposes Penalty Of ₹ 10 Crore On HDFC Bank )
The violations include non-compliance with certain provisions of directions issued by RBI on ‘Lending to Non-Banking Financial Companies (NBFCs)’ ‘Bank Finance to Non-Banking Financial Companies (NBFCs)’ and ‘Loans and Advances – Statutory and Other Restrictions’, the central bank said in its statement.

The action by the RBI is based on the deficiencies in regulatory compliance and will not affect the customer-related activities of any of these banks, such as the validity of any transaction. The RBI imposed a penalty of ₹ 50 lakh on the State Bank of India – the country’s largest lender, and ₹ 2 crore on Bank of Baroda.

A penalty of ₹ 1 crore penalty has been imposed each on Bank of Maharashtra, Bandhan Bank, Credit Suisse AG, Central Bank of India, IndusInd Bank, Indian Bank, Karur Vysya Bank, Karnataka Bank, Punjab and Sind Bank, The Jammu & Kashmir Bank, South Indian Bank, and the Utkarsh Small Finance Bank.

Here’s the full list by RBI along with the amount of monetary penalty imposed on each of the banks:

9q35e22g

The central bank said that the scrutiny in the accounts of the “companies of a group” was carried out and it was observed that the banks had failed to comply with certain provisions of the Banking Regulation Act, 1949. RBI then issued notices issued to the banks, advising them to show cause as to why a penalty should not be imposed for non-compliance with the directions of those provisions.

After notices were issued, the RBI received replies from the banks and examined the extent of the charges of non-compliance with the provisions of the Banking Regulation Act, before imposing the monetary penalty on the 14 banks.

Leave a Reply

Your email address will not be published. Required fields are marked *