The Reserve Bank of India (RBI) on Thursday imposed a penalty of Rs 2 crore on Standard Chartered Bank for for delays in reporting of frauds.
The fraud was revealed during the statutory inspection by the RBI with reference to its financial position as on March 31, 2018 and March 31, 2019.
This comes after the RBI served notice to the bank.
Provision of law- section 46 and 47
“The 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, for delays in reporting of frauds to RBI, revealed during the statutory inspection of the bank with reference to its financial position as on March 31, 2018 and March 31, 2019.”
RBI issued notice
RBI has served a notice to the bank advising it to show cause as to why penalty should not be imposed on it for such non-compliance with the directions.
RBI statement
“After considering the bank’s reply to the notice and oral submissions made in the personal hearing, RBI concluded that the charge of non-compliance with aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.”
The central bank also noted that its 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.
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