The Reserve Bank of India (RBI) announced on Tuesday that it has fined India's largest lender, State Bank of India (SBI), Rs 2 crore for failing to follow regulations in the payment of remuneration to its employees via commissions.
"The Reserve Bank of India (RBI) has, by an order dated 15 March 2021, imposed a monetary penalty of Rs 2 crore SBI for contravention of provisions of section 10 (1) (b) (ii) of the Banking Regulation Act, 1949 and specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission," the central bank said in a statement.
This action is focused on regulatory enforcement issues and is not meant to be a judgement on the merits of any transaction or arrangement between the bank and its customers.
The bank's financial status as of March 31, 2017 and March 31, 2018, as well as the Risk Assessment Reports (RARs) pertaining thereto, and review of correspondence with the bank regarding payment of remuneration to its employees in the form of commission, disclosed, among other things, contravention of the Act and the aforementioned relevant directives.
SBI, India's largest bank, was fined Rs 7 crore by the Reserve Bank of India (RBI) in 2019 for violating norms related to non-performing assets (NPAs) and fraud risk management, among other items.
Shares of the SBI were seen trading at Rs 373, down by 1.31% on BSE at 01.01 pm IST.