RBI imposes Penalty on this PSU Bank for irregularity in Savings Accounts

 

For not adhering to certain RBI regulations, Punjab & Sind Bank has been fined ₹68.20 lakh by the Reserve Bank of India (RBI). The penalty was imposed in accordance with Sections 47A(1)(c), 46(4)(i), and 51(1) of the Banking Regulation Act of 1949.

Based on the bank's financial status as of March 31, 2023, RBI carried out a Statutory Inspection for Supervisory Evaluation (ISE 2023) in 2023. 

 

The following areas showed non-compliance with RBI's instructions during the inspection: 

 Failure to disclose significant Exposures: In order to track significant common exposures across banks, the bank failed to disclose borrowers with non-fund-based exposure of ₹5 crore and above to the Central Repository of Information on Large Credits (CRILC). 

 Inconsistencies in Savings Bank Accounts: In violation of RBI regulations on financial inclusion, the bank permitted some holders of Basic Savings Bank Deposit Accounts (BSBDAs) to open additional BSBDAs.

After detecting these violations, RBI issued a show-cause notice to Punjab & Sind Bank, asking for an explanation. The bank submitted its reply, additional clarifications, and oral representations during a personal hearing. However, after reviewing the bank’s responses, RBI determined that the charges were valid, leading to the imposition of the penalty.

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RBI imposes monetary penalty for non-compliance on Bank of India(BOI), Canara Bank and J&K Bank

Canara Bank, Bank of India, and Jammu & Kashmir Bank have all been hit with financial fines by the RBI for breaking regulatory guidelines. 

Canara Bank was fined ₹1.63 crore by the Reserve Bank of India (RBI) for failing to follow its rules regarding priority sector lending, deposit interest rates, and financial inclusion.

 For not transferring qualified funds to the Depositor Education and Awareness Fund within the allotted time, Bank of India was fined ₹1 crore. 

For violating guidelines pertaining to loans and advances, financial inclusion, and Know Your Customer (KYC) standards, Jammu & Kashmir Bank was fined ₹3.31 crore.

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RBI imposes Monetary Penalty on this PSU Bank

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.45 crore on Central Bank of India. This penalty has been imposed because the bank failed to comply with certain directions issued by the RBI. The central bank made this announcement on June 14.

According to an RBI press release, the Central Bank of India sanctioned a working capital demand loan to a Corporation against amounts receivable from the Government in the form of subsidies. This action was in violation of the RBI’s directions.

Additionally, the bank failed to credit the amount involved in unauthorized electronic transactions to the customer’s account within 10 working days from the date of notification by the customer. This also goes against the RBI’s guidelines.

Furthermore, the bank failed to resolve complaints and provide compensation to certain customers within 90 days from the date of receipt of such complaints. The RBI stated these reasons for imposing the penalty on the bank.

The RBI conducted a Statutory Inspection for Supervisory Evaluation of the bank with reference to its financial position as of March 31, 2022. Based on the findings of non-compliance with RBI directions and related correspondence, a notice was issued to the bank. The bank was given an opportunity to show cause as to why a penalty should not be imposed on it for its failure to comply with the directions.

After reviewing the bank’s reply to the notice, the RBI found that the charges against the bank were sustained, warranting the imposition of a monetary penalty.

It is important to note that the action taken by the RBI is based on deficiencies in regulatory compliance. The penalty is not intended to determine the validity of any transactions or agreements entered into by the bank with its customers.

The RBI emphasized that the imposition of the monetary penalty does not prejudice any other actions that may be initiated by the RBI against the bank.

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Central Information Commission impose penalty on BOI officers

 

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RBI imposes Rs. 2.5 crore penalty on three banks

The Reserve Bank of India (RBI) imposed a monetary penalty on three private and public sector lenders on Friday. The central bank charged Jammu & Kashmir Bank with Rs.2.5 crore penalty, while the Bank of Maharashtra faced a fine of Rs.1.45 crore. Axis Bank received the least amount of penalty among them to the tune of Rs.30 lakh.

Jammu & Kashmir Bank:

RBI imposed a Rs.2.5 crore penalty on J&K Bank for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures-Across Banks’, read with ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, ‘Loans and Advances – Statutory and other Restrictions’ and ‘Time-bound implementation and strengthening of SWIFT-related operational controls’.

According to RBI's inspection, J&K Bank non-complied in --- (i) failed to ensure integrity and quality of data submitted to CRILC, (ii) extended term loans to a corporation (a) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects are sufficient to take care of the debt servicing obligations and (b) failing to ensure that the repayment/servicing of said term loans were not made out of budgetary resources and (iii) created financial/non-financial messages in SWIFT without first ensuring that the underlying transactions have been duly reflected in the CBS.

Bank of Maharashtra:

This government-owned bank was imposed with Rs.1.45 crore penalty for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’ and Advisory on ‘Man in the Middle (MiTM) Attacks in ATMs’ (the Advisory).

BoM committed non-compliance in the extent of --- (1) it sanctioned a term loan to a Corporation (i) in lieu of or to substitute budgetary resources envisaged for certain projects; (ii) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations; and (iii) the repayment/servicing of which was made out of budgetary resources, and (2) it failed to implement required control measures for ATMs relating to end-to-end encryption of communication between the ATM terminal/PC and the ATM Switch, within the prescribed timeline.

Axis Bank:

Axis Bank, one of the leading private sector lenders, was penalised with Rs.30 lakh due to its non-compliance with certain provisions of the RBI directions on ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts’.

As per RBI's inspection, Axis Bank had levied penal charges in certain accounts for late payment of credit card dues though the customers had paid the dues by the due date, through third party platforms.

Notably, before imposing the charges, RBI had sent notices to these three banks --- advising them to show cause as to why a penalty should not be imposed on them for failure to comply with the directions issued.

After considering the banks' reply to the notice, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted the imposition of monetary penalty on these banks.

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RBI imposes Rs 84.50 lakh penalty on this PSU Bank

 

RBI on Friday said it has imposed a penalty of Rs 84.50 lakh on Central Bank of India (the bank) for non-compliance with certain provisions of norms related to frauds classification and reporting. The Reserve Bank had conducted statutory inspection for supervisory evaluation of the bank with reference to its financial position as on March 31, 2021.

Examination of the reports revealed that the public sector lender had failed to report as fraud to RBI certain accounts within seven days of decision of Joint Lenders' Forum (JLF) to declare the accounts as fraud.

It had recovered SMS alert charges from its customers on flat basis rather than on actual usage basis.

The RBI had issued a notice to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions.

"After considering the bank's reply to the notice and oral submissions made during the personal hearing, 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 central bank said.

RBI, however, added the penalty 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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RBI imposes penalties on BoI and Federal Bank

Reserve Bank of India (RBI) on Friday said it has imposed a penalty of Rs 5.72 crore on Federal Bank for deficiencies in regulatory compliance.

A  penalty of Rs 70 lakh has also been imposed on Bank of India for non-compliance with certain provisions of Know Your Customer (KYC) norms and instructions on 'compliance function in banks' issued by RBI, it said in a statement.

About Federal Bank, RBI said the bank failed to ensure that no incentive (cash or non-cash) was paid to its staff engaged in insurance broking/corporate agency services by the insurance company, according to a separate statement.

RBI had carried out Statutory Inspection for Supervisory Evaluation (lSE) of the bank with reference to its financial position as on March 31, 2020.

In another statement, RBI said a fine of Rs 7.6 lakh has been imposed on Dhani Loans and Services Limited, Gurugram for non-compliance with KYC norms.

RBI said the penalities are 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 two banks and Dhani Loans and Services with their customers.

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RBI slaps penalty of Rs 1.95 crore on this private bank

The Reserve Bank of India on Monday imposed a monetary penalty of Rs 1.95 crore on Standard Chartered Bank - India for failing to comply with guidelines issued for customer protection, cyber security, credit card operations and creation of central repository for large exposures.

The RBI conducted a statutory inspection of bank’s books and it’s inspection report revealed that that Standard Chartered had failed to credit the amount involved in the unauthorised electronic transactions back to customer accounts. The regulator’s inspection also revealed that the bank was not reporting cyber security incidents within the prescribed time period.

The RBI which conducted a statutory audit in the bank’s books found that the foreign lender was also non-compliant in authorising the direct sales agents to conduct KYC verification, and failed to ensure integrity and quality of data submitted in Central Repository of Information on Large Credits (CRILC).

“A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of directions,@ the RBI said. “After considering the bank’s replies to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention was substantiated and warranted imposition of monetary penalty on the bank.

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