The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 crore on IndusInd Bank Limited for non-compliance with the directions issued by the RBI on Income Recognition and Asset Classification (IRAC) norms and contravention of regulatory restrictions pertaining to non-fund based (NFB) facilities.
“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 bank with its customers,” the RBI said in a statement.
“This penalty has been imposed in exercise of powers vested in the RBI under the provisions of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to certain directions/ guidelines issued by the RBI,” the RBI said.
According to the RBI, the statutory inspection of the bank with reference to its financial position as on March 31, 2016 revealed violations of various regulations issued by RBI in the assessment of non-performing assets (NPAs) and extension of NFB facilities.
“Based on the inspection report and other relevant documents, a 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 directions issued by the RBI. After considering the bank’s reply, oral submissions made in the personal hearing, and also the additional information and documents furnished, the RBI came to the conclusion that the charges of non-compliance with RBI guidelines were substantiated and warranted imposition of monetary penalty,” the RBI said.