India’s central bank imposes ₹1 crore penalty on the country’s biggest lender

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 crore on State Bank of India, the country’s largest lender. On Monday, India’s apex bank, in a press statement, said that the bank is being penalised for “non-compliance with the directions” of the fraud classification rules.

The RBI said that “a scrutiny was carried out” in one of the customer accounts. The central bank said that it found out that there was a delay in reporting of fraud in the above-mentioned account to the RBI.

Fine levied on SBI for non-compliance with the directions contained in 'Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016', the RBI said in a statement.

In a separate statement, the RBI imposed a Rs 1.95 crore penalty on Standard Chartered Bank for non-compliance of the directions issued by the RBI on 'Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions', 'Cyber Security Framework in Banks', 'Credit Card Operations of banks' and Code of Conduct in Outsourcing of Financial Services by banks' among others, the central bank said in a statement.

These monetary penalties have been imposed in exercise of powers vested in RBI under the Banking Regulation Act, 1949, it said.

These actions are based on the deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, it added.

After considering replies from both banks to the notices, oral submissions made during the personal hearing, and additional submissions made by the lenders, it said, the RBI came to the conclusion that the charge of contravention of/ non-compliance with various norms.

The RBI directions were substantiated and warranted imposition of monetary penalty on these lenders, to the extent of non-compliance, the statement said.

(With inputs from PTI)

SEE ALSO:
Brazilians bought more than $4 billion in cryptocurrencies this year as the country looks to regulate Bitcoin