The RBI has imposed a penalty of Rs. 7 Crore on the country’s largest bank SBI (State Bank of India).
The statutory inspection of SBI related to the financial position as on March 2017 has disclosed the violation of compliances and the reasons of imposing penalty, which includes:
- Non-compliance with norms related to NPA identification.
- Non-compliance of income recognition and asset classification (IRAC) norms,
- Non-compliance of code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large credits (CRILC)
- Fraud rick management, classification and reporting of frauds.
On the basis of Inspection report and other supporting evidences, a show cause notice was issued to the bank advising it to “show cause as to why penalty should not be imposed on it for non-compliance with the directions issued by RBI”.
The reply and oral submissions in the personal hearing by the SBI bank has been submitted to RBI. After considering all the relevant facts, RBI has concluded that the above mentioned non-compliances with the RBI directions were substantiated and monetary penalty shall be imposed.
RBI has further clarified that the action of imposing penalty is not related to the validity of any transaction or agreement entered with the customers by bank but based on the deficiencies and violations made by SBI, which are the laid down directions by RBI required to be followed by banks.