Rs. 1 Cr penalty imposed on SBI for deficiencies in regulatory compliance
The Reserve Bank of India (RBI) imposed a monetary penalty worth Rs. 1 crore on the State Bank of India this Monday. The penalty was brought on by deficiencies in the manner in which the bank complied with RBI regulations pertaining to fraud classification and reporting by commercial banks. RBI scrutiny found that the bank had delayed the reporting of fraud in a customer account maintained by SBI.
“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 bank with its customers,” the RBI stated.
The RBI issued a show-cause notice to the State Bank of India asking it to justify why a monetary penalty should not be levied on it for non-compliance. The central bank then considered the bank’s response to the charges leveled, RBI came to the decision that the charges were not unfounded and consequently warranted the imposition of a monetary penalty.
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