The Reserve Bank of India (RBI) imposed monetary penalty on 11 banks for non-compliance with provisions of “Frauds classification and reporting by commercial banks and select financial institutions (FIs)”. Public sector banks (PSBs), such as State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB) are among those who have been penalised.
Individual penalty on these 11 banks ranges from Rs1.5 crore to Rs50 lakh. Overall, the combined penalty comes to Rs8.5 crore.
In a statement, the central bank says, "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 banks with their customers."
"It was observed that despite having been advised by RBI to report fraud in an account "immediately" in the backdrop of Central Bureau of Investigation (CBI) having initiated criminal proceedings, the banks had delayed or did not report fraud to RBI resulting in non-compliance with directions issued by RBI as mentioned above."
Other lenders penalised by RBI include, Corporation Bank, Federal Bank Ltd, Indian Overseas Bank (IOB), Jammu & Kashmir Bank Ltd, Oriental Bank of Commerce (OBC), Punjab & Sind Bank, UCO Bank and United Bank of India.