The Reserve Bank of India (RBI) has levied a hefty fine of Rs 2 crore on the State Bank of India (SBI), the nation’s largest public sector bank, citing non-compliance with regulatory guidelines. Additionally, penalties have been imposed on Canara Bank and City Union Bank. Canara Bank faces a fine of Rs 32.30 lakh, while City Union Bank has been penalized with Rs 66 lakh.
Reasons Behind the Penalties:
SBI: The penalty on SBI stems from a Statutory Inspection for Supervisory Evaluation conducted by the RBI. The inspection revealed that the bank had pledged over 30% of the paid-up share capital of certain companies without depositing the requisite amount in the Depositor Education and Awareness Fund within the stipulated period outlined in the Banking Regulation Act. Following a show-cause notice, the RBI determined that SBI had violated regulations, warranting the imposed penalty.
Canara Bank: RBI’s investigation found that Canara Bank failed to promptly rectify subsequent amendments in information provided to credit information companies, neglecting to re-upload the corrected data within seven days of receiving rejections. Additionally, the bank restructured accounts that did not qualify as standard assets, leading to regulatory action.
City Union Bank: The penalty on City Union Bank was enforced due to discrepancies between the assessment of non-performing assets by the bank and the reports submitted to the RBI. Furthermore, the bank lacked a structured system to periodically review the risk categorization of customer accounts, further contributing to regulatory non-compliance.
