The Reserve Bank of India (RBI), which serves as the central banking institution of the country, has recently levied monetary fines on several banks. These include the State Bank of India (SBI), Indian Bank, and Punjab & Sind Bank. The reason for this action is their failure to comply with certain regulatory guidelines set by the RBI.
The State Bank of India (SBI), a major public sector bank in the country, has been hit with a fine of ₹1.3 crore. This penalty was imposed due to the bank’s failure to adhere to specific RBI guidelines on ‘Loans and Advances – Statutory and Other Restrictions’ and ‘Guidelines on Management of Intra-Group Transactions and Exposures’.
And similarly, the Indian Bank has been penalized with a fine of ₹1.62 crore. This was due to violations of certain guidelines on ‘Loans and Advances – Statutory and Other Restrictions’, Know Your Customer (KYC) norms, and ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’.
Punjab & Sind Bank, another public sector entity, has been subjected to a monetary penalty of ₹1 crore. The bank was found to be in violation of certain aspects of the Depositor Education and Awareness Fund Scheme.
The RBI has made it clear that these penalties are a result of lapses in regulatory compliance. They are not meant to pass judgment on the validity of any transaction or agreement made by the banks with their customers. This action highlights the significance of regulatory compliance in ensuring the integrity and stability of the banking system.