RBI imposes monetary penalty of Rs 1 crore on SBI

RBI has imposed a monetary penalty of Rs 1 crore on State Bank of India (SBI) for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016’: Reserve Bank of India (RBI)

This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. This action is based on the 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 RBI conducted scrutiny of the bank in a customer account maintained with the bank and the examination of the scrutiny report revealed non-compliance with the directions on reporting of fraud in the said account to RBI, the central bank said.

“In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for such non-compliance with the said directions,” the RBI said.

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After considering SBI’s reply, the Reserve Bank of India came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, the RBI said.

Notably, this is not first time when Reserve Bank of India has fined SBI, before this SBI had been fined by the Reserve Bank of India on July 7, 2021, over deficiencies in regulatory compliance. A fine of Rs 50 lakh had been imposed on the State Bank of India by RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1), of the Banking Regulation Act, 1949.

Along with this, the RBI had also imposed penalties on Bank of Baroda (Rs 2 crore), and Rs 1 crore penalty on Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab and Sind Bank, South Indian Bank, The Jammu & Kashmir Bank, and Utkarsh Small Finance Bank.

(With Agency Inputs)