Blog: RBI Imposed Monetary Penalty of Rs.32 Lakh on this Bank; Check the Name of Bank – StudyCafe

RBI Imposed Monetary Penalty of Rs.32 Lakh on this Bank; Check the Name of Bank

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹32 Lakh (Rupees Thirty-two lakh only) on Indian Bank (the bank), for non-compliance with certain provisions of Reserve Bank of India (Fraud classification and reporting by commercial banks and select FIs) Directions 2016, by an order dated August 03, 2022.

This fine has been levied in accordance with the authority granted to the RBI by Section 47A (1)(c) of the Banking Regulation Act of 1949, read in conjunction with Sections 46(4)(i) and 51(1).

This action is based on the regulatory compliance shortcomings and is not meant to rule on the legality of any deal or arrangement the bank has with its clients.

Background

The bank’s financial position as of March 31, 2019, was the subject of RBI’s Statutory Inspection for Supervisory Evaluation (ISE). Upon examination of the Risk Assessment Report, Inspection Report, and all related correspondence, it became clear that the bank had not complied with the aforementioned instructions to the extent that it had occasionally delayed providing flash reports to RBI. A notice was sent to the bank in response to this, instructing it to provide justification for not facing a fine for failing to follow the RBI’s directives as specified in the notice.

The RBI determined that the charge of non-compliance with the aforementioned RBI directions was substantiated and warranted imposition of a monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions, after taking into account the bank’s response to the notice, oral arguments made during the personal hearing, and additional submissions made by the bank.

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