The Reserve Financial institution on Monday stated it has imposed penalties on three state-owned banks, together with SBI and Indian Financial institution, for violation of varied regulatory norms.
The Reserve Financial institution of India (RBI) has, by an order dated September 21, 2023, imposed a financial penalty of ₹1.30 Crore (Rupees One Crore and Thirty Lakh solely) on State Financial institution of India (the financial institution) for non-compliance with sure instructions issued by RBI on ‘Loans and Advances – Statutory and Different Restrictions’ and ‘Tips on Administration of Intra-Group Transactions and Exposures’. This penalty has been imposed in train of powers vested in RBI conferred below the provisions of Part 47A(1)(c) learn with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
RBI stated that the examination of the Threat Evaluation Report/Inspection Report pertaining to ISE 2021, and all associated correspondence in that regard, revealed, inter alia, non-compliance with the aforesaid instructions by the financial institution, to the extent it (1) sanctioned a time period mortgage to a Company (i) in lieu of or to substitute budgetary assets envisaged for sure initiatives; (ii) with out enterprise due diligence on the viability and bankability of the initiatives to make sure that income streams from the initiatives had been enough to deal with the debt servicing obligations; and (iii) the reimbursement/servicing of which was made out of budgetary assets, and (2) failed to stick to the intra-group publicity restrict, because it didn’t contemplate the intra-day restrict sanctioned to its group entity for the aim of computing intra-group publicity restrict. In furtherance to the identical, a discover was issued to the financial institution advising it to point out trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the instructions issued by RBI, as said therein.
After contemplating the financial institution’s reply to the discover, oral submissions made throughout the private listening to and examination of further submissions made by it, RBI got here to the conclusion that the aforementioned cost of non-compliance was substantiated and warranted imposition of financial penalty on the financial institution.
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RBI imposes financial penalty on Punjab & Sind Financial institution
The Reserve Financial institution of India (RBI) has, by an order dated September 21, 2023, imposed a financial penalty of ₹1.00 crore (Rupees One crore solely) on Punjab & Sind Financial institution (the financial institution) for non-compliance with the provisions of sub-section (2) of Part 26A of the Banking Regulation Act, 1949 (BR Act) learn with instructions issued by RBI on ‘The Depositor Schooling and Consciousness Fund Scheme, 2014-Part 26A of Banking Regulation Act, 1949-Operational Tips’. This penalty has been imposed in train of powers vested in RBI below the provisions of Part 47A(1)(c) learn with Sections 46(4)(i) and 51(1) of the BR Act.
This motion relies on the deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients.
The Statutory Inspection for Supervisory Analysis (ISE 2021) of the financial institution was performed by RBI as regards to its monetary place as on March 31, 2021. The examination of the Threat Evaluation Report/Inspection Report pertaining to ISE 2021, and all associated correspondence, revealed, inter alia, non-compliance with the aforesaid provisions of the BR Act and RBI instructions by the financial institution, to the extent it did not credit score eligible quantity to Depositor Schooling and Consciousness Fund throughout the interval prescribed below Part 26A of the BR Act. In furtherance to the identical, a discover was issued to the financial institution advising it to point out trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the provisions of the BR Act and the instructions issued by RBI, as said therein.
After contemplating the financial institution’s reply to the discover, oral submissions made throughout the private listening to and extra submissions made by it, RBI got here to the conclusion that the cost of non-compliance with the provisions of the BR Act and the RBI instructions was substantiated and warranted imposition of financial penalty on the financial institution.
RBI imposes financial penalty on Indian Financial institution
The Reserve Financial institution of India (RBI) has, by an order dated September 21, 2023 imposed a financial penalty of ₹1.62 crore (Rupees One Crore and Sixty Two Lakh solely) on Indian Financial institution (the financial institution) for non-compliance with sure instructions issued by RBI on ‘Loans and Advances – Statutory and Different Restrictions’, ‘Reserve Financial institution of India [Know Your Customer (KYC)] Instructions, 2016’ and ‘Reserve Financial institution of India (Curiosity Fee on Deposits) Instructions, 2016’. This penalty has been imposed in train of powers vested in RBI conferred below the provisions of Part 47 A (1) (c) learn with Sections 46 (4) (i) and 51(1) of the Banking Regulation Act, 1949.
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Up to date: 25 Sep 2023, 06:33 PM IST
Supply: Live Mint