The Reserve Bank of India (RBI) has penalised the country’s largest lender State Bank of India (SBI) for not complying with specific directions, and has imposed a fine of Rs 1 crore on it.
The violation is related to 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, the RBI said.
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.
RBI scrutiny
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.
RBI issued notice to SBI
After considering SBI’s reply, the RBI 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.
RBI consider reply
After considering the bank’s reply to the notice and oral submissions made by the bank in the personal hearing, the RBI came to the conclusion that the charge of noncompliance was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions, the statement said.
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