RBI imposes penalty on Bank of India, Karnataka Bank
The central bank also imposed a penalty of Rs 1.2 crore on Karnataka Bank for non-compliance with NPA norms.
In a statement, RBI said it has imposed a monetary penalty of Rs 5 crore on Bank of India (BoI) for non-compliance with "certain provisions of the directions issued by RBI on 'Income Recognition, Asset Classification and Provisioning pertaining to Advances - Divergence in NPA accounts', 'Opening of current accounts by banks – Need for discipline', and 'Classification and reporting of frauds'".
Giving details, it said the statutory inspection of BoI with reference to its financial position as on March 31, 2017 and March 2018 and the risk assessment reports pertaining thereto revealed, inter-alia, non-compliance with the certain directions.
A notice was issued to the bank in this regard.
After considering the bank's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI concluded that the charges of non-compliance with RBI directions warranted imposition of monetary penalty.
The penalty on Karnataka Bank has been imposed for non-compliance with certain provisions of directions on 'Prudential Norms on Income Recognition, Asset Classification and Provisioning Pertaining to Advances - Divergence in NPA Accounts' and 'Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances'.
RBI also imposed a penalty of Rs 30 lakh on Saraswat Co-operative Bank for non-compliance with directions on 'Income Recognition and Asset Classification (IRAC) norms.'
In all three cases, action is based on the deficiencies in regulatory compliance, and is not intended to pronounce upon the validity of any transaction or agreement entered into by them with customers, RBI said. NKD RVK