The Reserve Financial institution of India (RBI) on Friday imposed a financial penalty of ₹27.50 lakh on a public sector financial institution, Punjab & Sind Financial institution for non-compliance with sure instructions of the central financial institution.
The penalty was for non-compliance with RBI instructions on ‘Exterior Benchmark Primarily based Lending’.
In an announcement, RBI stated, “This motion relies on the deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects.”
The penalty comes after when RBI had carried out a statutory inspection for Supervisory Analysis of the financial institution regarding its monetary place as of March 31, 2020, and the examination of the Threat Evaluation Report, Inspection Report, and all associated correspondence about the identical.
RBI discovered non-compliance with the instructions issued by RBI, inter-alia, to the extent the financial institution linked sure floating price retail loans and floating price loans to Micro and Small Enterprises, prolonged by it on or after October 01, 2019, to MCLR as an alternative of an exterior benchmark.
Nonetheless, earlier than penalising the financial institution, RBI had issued a discover to the lender advising it to point out trigger as to why a penalty shouldn’t be imposed on it for failure to adjust to the instructions issued by RBI, as said therein.
It stated, “after contemplating the financial institution’s reply to the discover, oral submissions made within the private listening to, and examination of further submissions made by it, RBI got here to the conclusion that the cost of non-compliance with the aforesaid RBI instructions was substantiated and warranted imposition of financial penalty, to the extent of non-compliance with such instructions.”
On BSE, the financial institution shares closed at ₹15.30 apiece down by 0.97%.
Supply: Live Mint