RBI slaps Rs 7-crore penalty on SBI for violating various regulatory norms

International News

The Reserve Bank of India (RBI) has imposed a penalty of Rs 7 crore on State Bank of India (SBI) for non-compliance with regulatory norms such as income recognition and asset classification (IRAC) and sharing information. This is one of the highest penalty amounts on any bank in the recent past.
SBI, the country’s biggest bank, also failed to comply with directions on opening and operating current accounts, reporting of data to the Central Repository of Information on Large Credits (CRILC), and reporting of frauds. The RBI had carried out the statutory inspection to assess SBI’s financial position on March 31, 2017.
The inspection revealed non-compliance with directions on IRAC norms, sharing of information about
customers with other banks, reporting of data, fraud risk management, and classification and reporting of frauds.
Following the inspection, the RBI issued a show-cause notice.
After considering the bank’s reply and oral submissions, the RBI came to the conclusion that charges of non-compliance were substantiated and warranted imposition of monetary penalty.
The RBI said the penalty has been imposed in exercise of powers vested under various sections of the Banking Regulation Act, 1949. This action is based on deficiencies in regulatory compliance. It is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said.
Rs 10-lakh fine on Union Bank
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 The Reserve Bank of India(RBI) has imposed a penalty of Rs 10 lakh on Union Bank of India for non-compliancewith the directions on cyber security framework.