Central Bank Reserve Bank of India has imposed a fine of Rs 2 crore on the country’s largest public sector bank State Bank of India (SBI). This action has been taken due to non-compliance of regulatory rules on the bank. Along with this, the central bank has also imposed penalty on Canara Bank and City Union Bank. Where a fine of Rs 32.30 lakh has been imposed on Canara Bank. At the same time, a fine of Rs 66 lakh has been imposed on City Union Bank.
Why was penalty imposed on SBI?
RBI had done Statutory Inspection for Supervisory Evaluation against SBI. The report revealed that the bank had taken more than 30 per cent of the paid-up share capital of some companies as a pledge and had not deposited the amount in the Depositor Education and Awareness Fund within the period prescribed under the Banking Regulation Act. . RBI had given show cause notice to the bank, after which in the investigation it was decided that this penalty should be imposed on SBI due to violation of rules.
Why was action taken against Canara Bank?
RBI found in its investigation that Canara Bank did not correct the subsequent amendments in the information given to the credit information companies and re-upload it within seven days of receiving this rejection. Also, such accounts were restructured which were not standard assets.
RBI has also imposed penalty on City Union Bank because there was a difference in the assessment of non-performing assets of City Union Bank and the report given by the bank. Also, no system was prepared by the bank to periodically review the risk categorization of customers’ accounts.
