The Reserve Bank of India (RBI) has slapped a penalty of Rs 40 lakh on State Bank of India (SBI) for not complying with its directions on detection and impounding of counterfeit notes.
“The RBI has imposed, on March 01, 2018, a monetary penalty of Rs 4 million on State Bank of India for non-compliance with the directions issued by the RBI on Detection and Impounding of Counterfeit Notes,” the central bank said in a notification issued Wednesday.
The RBI said it found deficiencies on SBI’s part in regulatory compliance with counterfeit notes regulations. The penal action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said.
The banking regulator had carried out inspection of currency chests of two branches of the country’s largest lender and noticed violation of its instructions issued on the detection and impounding of counterfeit notes. “Based on the inspection report and other relevant documents, a notice, dated January 5, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI,” it said.
After considering the bank’s reply and oral submissions made in personal hearing, the RBI came to the conclusion that the aforesaid charges of non-compliance with its directions/ guidelines were substantiated and warranted imposition of monetary penalty, said the notification.