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Why RBI Imposed Rs 1 Crore Penalty On India's Largest Lender?

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The Reserve Bank of India (RBI) has fined the country's largest lender, State Bank of India (SBI), for failing to follow specified instructions and levied a fine of Rs 1 crore. According to the RBI, the breach is linked to laws governing fraud classification and reporting by commercial banks and other financial institutions.

 
Why RBI Imposed Rs 1 Crore Penalty On India's Largest Lender?

The central bank stated in a statement that this action is based on regulatory compliance issues and is not intended to rule on the legitimacy of any transaction or agreement entered into by the bank with its clients.

Also, Standard Chartered Bank was fined 1.95 crores by the central bank for failing to notify a cyber security breach.

The RBI conducted a review of a customer account held by the bank, and an assessment of the review report and all accompanying correspondence revealed, among other things, non-compliance with the aforementioned orders to the extent of a delay in reporting fraud in the account to the RBI. A notice was given to the bank in response to this, instructing it to show cause why a penalty should not be levied for its failure to comply with the abovementioned orders.

RBI concluded that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions, after considering the bank's reply to the notice and oral submissions made by the bank during the personal hearing.

Shares of SBI on Monday ended the trade higher by 1.29% at Rs 496 on NSE. Over a three-year period, the stock returned 90.71 percent, while the Nifty Bank provided investors a 54.96 percent return. The bank shares have consistently climbed during the last year, gaining by 143 percent.

Read more about: rbi sbi
Story first published: Tuesday, October 19, 2021, 8:24 [IST]
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