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Rs 1 Crore Penalty Imposed On SBI For Non-Compliance Of Frauds Classification: RBI


New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on the State Bank of India for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016’.

This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.

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This 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 the bank with its customers.

A scrutiny was earlier 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, inter alia, non-compliance with the aforesaid directions to the extent of delay in reporting of fraud in the said account to RBI.

In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for such non-compliance with the said directions, the RBI said in a release.

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


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