Legal UpdatesRBI

RBI imposes penalty of ₹ 7 Crores on SBI for following non- compliances

RBI Updates

On 15 July 2019, RBI has imposed penalty of ₹ 7 Crores on State Bank of India (SBI) for non-compliance with the following directions issued by RBI :-

(i) Income Recognition and Asset Classification (IRAC) norms

(ii) code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC), and

(iii) fraud risk management and classification and reporting of frauds.

RBI mentions that the 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. Further, RBI clarifies that in statutory inspection of the bank with reference to its financial position as on March 31, 2017 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 were revealed. Thereafter, RBI had issued the notice to the Bank advising it to show cause as to why penalty should not be imposed on it. After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion of the aforesaid charges of non-compliance with RBI directions.

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