RBI Fines SBI, Indian Bank for Breach of Norms
IANS 26 September 2023
The Reserve Bank of India (RBI) on Monday slapped fines on State Bank of India, Indian Bank, Punjab & Sind Bank, and Fedbank Financial Services for violating norms.
A penalty of Rs1.3 crore was imposed on State Bank of India (SBI), Rs1.62 crore on Indian Bank, Rs1 crore on Punjab & Sind Bank, and Rs8.80 lakh on Fedbank Financial Services, the RBI said in separate press statements.
The fine was imposed on SBI and Indian Bank as they sanctioned a term loan to a corporation in lieu of or to substitute budgetary resources envisaged for certain projects, 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 the repayment/ servicing of which was made out of budgetary resources, RBI said.
In addition, SBI failed to adhere to the intra-group exposure limit, as it did not consider the intra-day limit sanctioned to its group entity for the purpose of computing intra-group exposure limit.
Indian Bank was fined as it allowed operations and did not close several accounts opened using OTP-based e-KYC in non-face-to-face mode, even after the expiry of one year without conducting customer due diligence procedure, and opened several savings accounts in the names of customers not eligible to maintain savings deposit account, the RBI statement said.
Similarly, Punjab & Sind Bank failed to credit the eligible amount to a Depositor Education and Awareness Fund within the period prescribed under Section 26A of the BR (Banking Regulation) Act, due to which the monetary penalty was imposed.
Fedbank Financial Services has been fined as it delayed the reporting of a fraud to RBI.
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2 months ago
It is so cruel that the shareholders bear the fines instead of the employees who probably could even have taken bribes to break the norms .
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