Shares of Lakshmi Vilas Bank and Syndicate Bank fell by up to 5 per cent on Tuesday after the RBI imposed a monetary penalty on them for violating asset classification and fraud detection norms.
Lakshmi Vilas Bank scrip went lower by 4.96 per cent to its lower circuit level as well as one-year low of Rs 22.05 on the BSE. Shares of Syndicate Bank also fell 2.24 per cent to Rs 24 — its 52-week low.
The Reserve Bank has imposed a monetary penalty of Rs 1 crore on Lakshmi Vilas Bank and Rs 75 lakh on Syndicate Bank for violating asset classification and fraud detection norms.
“The Reserve Bank of India (RBI) has, by an order dated October 14, 2019, imposed monetary penalty of Rs 1 crore on Lakshmi Vilas Bank for non-compliance with certain provisions of directions issued by RBI on ‘Income Recognition and Asset Classification (IRAC) norms,” RBI said in a release on Monday.
In a similarly worded release, it said a monetary penalty of Rs 75 lakh has been imposed on Syndicate Bank for non-compliance with the directions issued by RBI on frauds classification and reporting; innovative housing loan products wherein upfront disbursal of loans is done.