The Reserve Bank of India (RBI) on May 3 imposed a monetary penalty of Rs 3 crore on ICICI Bank for certain rule violations.
Reason
The penalty has been imposed for contravention of certain directions issued by the RBI on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks.
The 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.
According to RBI
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).”
Giving details, the RBI said an examination of correspondence in the matter of shifting of securities from one category to another revealed, inter alia, contravention of the directions.
Notice issued to the bank
A notice was issued to ICICI Bank advising it to show-cause as to why penalty should not be imposed on it for failure to comply with the directions issued by the RBI.
After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, the RBI said.
Bank’s Financials
The private sector lender on April 24 clocked a 260.5 percent year-on-year (YoY) growth in standalone profit at Rs 4,402.61 crore for the quarter ending March 2021.
Net interest income (NII), the difference between interest earned and interest expended, grew by 16.9 percent to Rs 10,431.13 crore in Q4FY21 compared to Rs 8,926.9 crore in the year-ago period.
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