RBI imposes penalty on 7 bankshttps://indianexpress.com/article/business/banking-and-finance/rbi-imposes-penalty-on-7-banks-5580962/

RBI imposes penalty on 7 banks

The banks are: Allahabad Bank (Rs 1.5 crore), Andhra Bank (Rs 1 crore), Bank of Maharashtra (Rs 1.5 crore), Indian Overseas Bank (Rs 1.5 crore), HDFC Bank (Rs 20 lakh), IDBI Bank (Rs 20 lakh) and Kotak Mahindra Bank (Rs 20 lakh).

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With this, the RBI had slapped penalty on 11 banks in the last one week for violation of various norms. (Express Photo by Pradip Das)

The Reserve Bank of India (RBI) has imposed monetary penalty on seven banks for non-compliance with various directions issued by the RBI, including monitoring of end use of funds.

The banks are: Allahabad Bank (Rs 1.5 crore), Andhra Bank (Rs 1 crore), Bank of Maharashtra (Rs 1.5 crore), Indian Overseas Bank (Rs 1.5 crore), HDFC Bank (Rs 20 lakh), IDBI Bank (Rs 20 lakh) and Kotak Mahindra Bank (Rs 20 lakh).

According to the RBI, these penalties have been imposed in exercise of powers vested in the Reserve Bank under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the above banks to adhere to the directions issued by the RBI.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers,” the RBI said.

With this, the RBI had slapped penalty on 11 banks in the last one week for violation of various norms.

However, the RBI has not spelt out the exact nature of the violations in its brief statements put on its website.

On February 7, the RBI slapped Rs 1 crore penalty on State Bank of India, the country’s largest lender, for violating norms. The penalty was levied on the bank for not monitoring the end use of funds in respect of one of its borrowers.

On February 5, the RBI had imposed a penalty of Rs 2.2 crore on private sector lender Axis Bank in two separate cases, Rs 2 crore on UCO Bank and Rs 1 crore on Syndicate Bank for violation of norms.

The Reserve Bank said a penalty of Rs 2 crore has been imposed each on Axis Bank and UCO Bank for non-compliance of norms related to payment through cheques.

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In another case, a penalty of Rs 20 lakh has been imposed on Axis Bank for contravention of the directions related to detection and impounding of counterfeit notes.