On Friday, the Reserve Bank of India (RBI) announced, “Fine of Rs 4.50 crore is being levied on IndusInd Bank for non-compliance with RBI’s prudential norms on income recognition, exposure norms, asset classification and provisioning pertaining to advances and among others.”
The bank was found violating ‘Creation of a Central Repository of Large Common Exposures – Across Banks’ read with directions on ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting,’ ‘SPARC – Monitoring of Information Submission’ by the bank, and ‘Disclosure in Financial Statements- Notes to Accounts.’
Based on the deficiencies in regulatory compliance, the action has been taken. “It is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” read the central bank’s release.
RBI found cases of non-compliance with its standard operating procedure or the standard directions during a statutory inspection of IndusInd Bank for the year ended March 31, 2019.
A show-cause notice has been issued to Induslnd Bank. The bank has been directed to pay the monetary penalty after considering its reply to the notice, examination of additional submissions and oral submissions made during the personal hearing.