The Reserve Bank of India has imposed penalties on 14 banks for failing to follow key requirements of RBI directives. Banks were fined for failing to follow RBI guidelines on lending to non-banking financial firms, bank funding to non-banking financial companies, loans and advances - statutory and other limits, and other regulations.
The Reserve Bank of India has imposed a total penalty of Rs 14.50 crore, with the Bank of Baroda paying the highest amount of Rs 2 crore and the State Bank of India receiving the lowest amount of Rs 50 lakhs.
"A scrutiny in the accounts of the companies of a group was carried out by the RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by the RBI and or contravened provisions of the Banking Regulation Act, 1949," the RBI said in its statement.
Banks were served with notices requiring them to show cause why a penalty should not be levied for non-compliance with the Banking Regulation Act, 1949's directions/provisions.
After considering the responses, the RBI determined that sanctions against the aforementioned fourteen institutions were merited.
Will the fine have an effect on customers?
The Central Repository of Large Common Exposures, Central Repository of Information on Large Credits (CRILC) reporting in banks, and Small Finance Bank operating norms have all been hacked, according to the RBI. The RBI further underlined that banks had breached sections 19(2) and 20(1) of the Banking Regulation Act, 1949. Because the fines are imposed on banks for failing to comply with regulatory requirements, the fines will have no effect on the banks' customers.
List of Banks fined
|Banks||Fine Amount (₹ in crore)|
|Bandhan Bank Ltd.||1.0|
|Bank of Baroda||2.0|
|Bank of Maharashtra||1.0|
|Central Bank of India||1.0|
|Credit Suisse AG||1.0|
|IndusInd Bank Ltd.||1.0|
|Karnataka Bank Ltd.||1.0|
|Karur Vysya Bank Ltd.||1.0|
|Punjab and Sind Bank||1.0|
|South Indian Bank Ltd.||1.0|
|State Bank of India||0.50|
|The Jammu & Kashmir Bank Ltd.||1.0|
|Utkarsh Small Finance Bank Ltd.||1.0|