RBI imposes Rs 1 crore fine on Indian Bank for violating cyber security norms

The Reserve Bank of India Tuesday said it has imposed a fine of Rs 1 crore on Indian Bank for violating cyber security norms.

The RBI has imposed, by an order dated November 30, 2018, a monetary penalty of Rs 10 million on Indian Bank for contravention of Circular on Cyber Security Framework in banks, the central bank said in a release.

The contravention is with regard to RBI's directions on Frauds- Classification and Reporting by Commercial Banks.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of...the Banking Regulation Act, 1949 taking into account the failure of the bank to adhere to the aforesaid guidelines and directions issued by RBI," it said.

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, the release added. 

Meanwhile, the central government will have to take stock of the current legal position in the fresh appointment of Reserve Bank of India (RBI) Governor, said Finance Secretary AN Jha on Tuesday.

His statement comes following the abrupt resignation of Urjit Patel as Governor yesterday, 10 months before the end of his tenure.

Whether the central bank will have a full-time or an interim Governor will be decided today, informed Jha.

Speculations about everything not being fine between Centre and RBI started pouring in after Centre had invoked Section 7 of the RBI Act, which allows it to issue directions to the central bank governor on matters of public interest.

On October 31, some media reports suggested Urjit Patel may consider resigning following an alleged rift with Union Finance Minister Arun Jaitley. Later, the Finance Ministry clarified that the government holds "extensive consultations with the RBI from time to time".

The Government in August 2016 had appointed Urjit Patel as the new Reserve Bank of India (RBI) Governor. He was India's 24th RBI Governor and was appointed for a term of three years starting September 4, 2016.

Patel, who cited ?personal reasons? for quitting the prestigious post, is the first RBI Governor to resign since 1990.

He stepped down ahead of the scheduled meeting of the RBI Board on December 14 to consider proposals like RBI governance and providing liquidity for Non-Banking Financial Companies (NBFCs).