Reserve Bank Of India (RBI) Imposes Penalty On These 14 Banks For Violation Of Various Rules

Reserve Bank of India imposed financial penalty on 14 banks for violation of guidelines

The Reserve Bank of India (RBI) imposed financial penalties - ranging between Rs 50 lakh to Rs 2 crore, on 14 banks together with the State Bank of India (SBI), Punjab and Sind Bank, and Bandhan Bank, amongst others, for contravention of varied regulatory norms, together with on lending to non-banking monetary corporations or NBFCs. These 14 banks embody non-public banks, public sector banks, co-operative banks, overseas banks, and in addition a small finance financial institution. (Also Read: Reserve Bank Of India Imposes Penalty Of ₹ 10 Crore On HDFC Bank )

The violations embody non-compliance with sure provisions of instructions 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 financial institution stated in its assertion. 

The motion by the RBI relies on the deficiencies in regulatory compliance and won't have an effect on the customer-related actions of any of those banks, such because the validity of any transaction. The RBI imposed a penalty of Rs 50 lakh on the State Bank of India - the nation's largest lender, and Rs 2 crore on Bank of Baroda.

A penalty of Rs 1 crore penalty has been imposed every 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 complete listing by RBI together with the quantity of financial penalty imposed on every of the banks:

RBI imposes penalty on 14 banks
Photo Credit: Reserve Bank of India

The central financial institution stated that the scrutiny within the accounts of the "companies of a group" was carried out and it was noticed that the banks had did not adjust to sure provisions of the Banking Regulation Act, 1949. RBI then issued notices issued to the banks, advising them to point out trigger as to why a penalty shouldn't be imposed for non-compliance with the instructions of these provisions.

After notices have been issued, the RBI acquired replies from the banks and examined the extent of the fees of non-compliance with the provisions of the Banking Regulation Act, earlier than imposing the financial penalty on the 14 banks.