The Reserve Bank of India (RBI) has imposed a monetary penalty on the State Bank of India (SBI) amounting to Rs 2 crore, for breaches in regulatory compliance as outlined by the Banking Regulation Act.
The central bank’s statement emphasized that the penalty targets compliance shortcomings and does not pass judgment on the validity of SBI’s customer agreements or transactions. This action comes in the wake of an RBI inspection that scrutinized SBI’s regulatory adherence and financial condition as of March 31, 2022.
The examination highlighted SBI’s over-pledging of shares beyond thirty percent of the paid-up capital in several firms and its failure to transfer the necessary funds to the Depositor Education and Awareness Fund within the stipulated period.
Similarly, Canara Bank was fined Rs 32.30 lakh for not complying with certain RBI guidelines, including the submission of credit information in a specified format, implementation of the ‘Resolution Framework 2.0’ for mitigating COVID-19 related distress among Micro, Small, and Medium Enterprises (MSMEs), and adherence to the resolution framework for COVID-19 impacted individuals and small businesses. The RBI’s action against Canara Bank was taken to address non-compliance issues, without assessing the legality of the bank’s dealings with its customers.
