The Reserve Bank of India (RBI) has imposed a penalty of Rs 7 crore on State Bank of India for non-compliance with the directions of the central bank.
According to the RBI, the penalty was for non-compliance on Income Recognition and Asset Classification (IRAC) norms, code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC) and fraud risk management and classification and reporting of frauds.
“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.
“The statutory inspection of the bank with reference to its financial position as on March 31, 2017 revealed non-compliance with directions issued by the RBI,” it added.
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, the banking regulator said.
After considering the bank’s reply and oral submissions made in the personal hearing, the RBI came to the conclusion that the charges of non-compliance with the RBI directions were substantiated and warranted imposition of monetary penalty, it said.