Top state-owned banks in the nation, including State Bank of India, Indian Bank, and Punjab & Sind Bank, were penalized, the Reserve Bank of India (RBI) stated on September 25. While highlighting the RBI’s dedication to preserving banking standards and guaranteeing client safety, these sanctions were implemented in response to violations of a number of regulatory criteria.
In a separate announcement, the RBI said that it has fined State Bank of India Rs 1.30 crore, Indian Bank Rs 1.62 crore, Punjab & Sind Bank Rs 1 crore, and Fedbank Financial Services Ltd Rs 8.80 lakh.
According to an RBI notification, the State Bank of India was fined Rs 1.3 crore for failing to follow particular instructions given by the RBI regarding Loans and Advances: Statutory and Other Restrictions and Guidelines on Management of Intra-Group Transactions and Exposures.
The Indian Bank was fined Rs. 1.62 crore, according to the Reserve Bank of India, for failing to follow rules relating to Loans and Advances- Statutory and Other Restrictions, KYC (Know Your Customer) processes, and the RBI (Interest Rates on Deposits) Directions, 2016.
Because Punjab & Sind Bank disregarded some requirements of the Depositor Education and Awareness Fund Scheme, it was fined Rs 1 crore. In addition, Fedbank Financial Services Ltd. was fined Rs. 8.80 lakh for failing to abide by certain rules intended to stop fraud in NBFCs.
Because they gave a term loan to a company rather than using the budgetary funds set aside for particular projects, SBI and the Indian Bank were fined money. Without doing sufficient analyses to determine the projects’ viability in terms of both feasibility and finances, this move was performed.
To make sure project earnings could pay debt payment requirements, this was done. The announcement said that budgetary funds were also used to pay for debt servicing and payback.
The RBI has emphasized in its explanation that the fines levied on the banks and the NBFC are due to insufficient regulatory compliance.
