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Wednesday, April 24, 2024

RBI Fines SBI ₹2 Crore, Canara Bank ₹32 Lakh

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The Reserve Bank of India (RBI) has fined State Bank of India (SBI) a penalty of ₹2 crore for violating certain sections of the Banking Regulation Act, 1949, and related schemes. Additionally, Canara Bank has been fined ₹32 lakh for failing to comply with regulatory directions concerning credit information reporting, COVID-19 relief measures for MSMEs, and resolution frameworks for individuals and small businesses.

The RBI conducted a statutory inspection of SBI’s financial position as of March 31, 2022, revealing that SBI held shares exceeding thirty percent of certain companies’ paid-up share capital as a pledgee and failed to transfer the eligible amount to the Depositor Education and Awareness Fund within the stipulated timeframe under the BR Act.

Following this discovery, the RBI issued a notice to SBI, prompting the bank to explain why penalties should not be imposed for the observed violations. After considering SBI’s response, oral arguments, and additional submissions, the RBI concluded that the bank had indeed contravened certain provisions of the BR Act, warranting the imposition of monetary penalties. Additionally, penalties were imposed on Canara Bank for similar regulatory breaches.

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