RBI imposes penalty of Rs 1 crore on State Bank of India over non-compliance of directions

The Reserve Bank of India imposed a monetary penalty of Rs 1 crore on 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 RBI under the provisions of section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949," read the Central Bank circular.

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, the RBI release read.

The main charge
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, inter alia, non-compliance with the directions to the extent of delay in reporting of fraud in the said account to RBI, the central bank release mentioned unequivocally.