State Bank of India fined Rs 1 crore by RBI over 'deficiencies in regulatory compliance'

The Reserve Bank of India on Monday imposed a monetary penalty of Rs 1 crore on State Bank of India (SBI) over non-compliance with fraud classification rules. 

As per the regulator, SBI failed to comply with the directions contained in 'Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016'. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce the validity of any transaction or agreement entered into by the bank with its customers, RBI said in an official release. 

The regulator has issued a notice to the lender, directing it to show cause as to why the Rs 1 crore penalty should not be imposed.

"A scrutiny was carried out by the RBI in a customer account maintained with the bank and the examination of the scrutiny report and all related correspondence pertaining to the same, revealed non-compliance with the aforesaid directions to the extent of delay in reporting of fraud in the said account to RBI," the regulator said in a statement.

"After considering the bank’s reply to the notice and oral submissions made by the bank in the personal hearing, RBI came to the conclusion that the charge of non- compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty," the regulator added.

Previous RBI fines on SBI

Notably, SBI had been fined by the Reserve Bank of India on July 7, 2021, over deficiencies in regulatory compliance. A fine of Rs 50 lakh had been imposed on the State Bank of India by RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1), of the Banking Regulation Act, 1949.

Along with this, the RBI had also imposed penalties on Bank of Baroda (Rs 2 crore), and Rs 1 crore penalty on Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab and Sind Bank, South Indian Bank, The Jammu & Kashmir Bank, and Utkarsh Small Finance Bank.

(With Agency Inputs)