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RBI fines SBI for not complying with regulatory norms

The Reserve Bank of India (RBI) has imposed a fine of Rs 7 crore on State Bank of India (SBI) for failing to comply with the regulatory guidelines on asset classification and income recognitions and norms for opening current accounts. The RBI order, passed on Monday. said the fine on the PSU banking major is also for failing to report data on corporate accounts to the Central Repository of Information on large credits (CRILC) and failing to implement fraud risk management.

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The Reserve Bank of India (RBI) has imposed a fine of Rs 7 crore on State Bank of India (SBI) for failing to comply with the regulatory guidelines on asset classification and income recognitions and norms for opening current accounts. The RBI order, passed on Monday. said the fine on the PSU banking major is also for failing to report data on corporate accounts to the Central Repository of Information on large credits (CRILC) and failing to implement fraud risk management.

The fine was specifically for violating the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms for -code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC), and fraud risk management and classification and reporting of frauds.

"This action is based on 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," RBI said in a release.

The statutory inspection of the bank with reference to its financial position as on March 31, 2017, revealed non-compliance with directions issued by RBI on IRAC norms, sharing of information about customers with other banks, reporting of data on CRILC, fraud risk management, and classification and reporting of frauds.

"Based on the inspection report and other relevant documents, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI. After considering the bank's reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," RBI said in a note.

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