Money & Banking

RBI imposes penalty on 3 lenders

Our Bureau Mumbai | Updated on May 28, 2020 Published on May 28, 2020

The Reserve Bank of India (RBI), on Thursday, said it has imposed a monetary penalty on Bank of India (₹5 crore), Karnataka Bank (₹1.20 crore) and Saraswat Co-operative Bank (₹30 lakh).

The central bank, in a statement, said it has imposed the penalty on Bank of India for non-compliance with certain provisions of the directions issued by it on ‘Income Recognition, Asset Classification (IRAC) and provisioning pertaining to advances - Divergence in NPA (non-performing asset) accounts’, ‘opening of current accounts by banks – Need for discipline’, and ‘classification and reporting of frauds.’

In the case of Karnataka Bank, the RBI imposed the penalty for non-compliance with certain provisions of the directions issued by it on ‘Prudential Norms on IRAC and provisioning pertaining to advances - Divergence in NPA Accounts’ and ‘Prudential norms on IRAC and Provisioning pertaining to Advances.’

In the case of Saraswat Co-operative Bank, the RBI imposed the penalty for non-compliance with directions issued by it on ‘IRAC norms.’

In all three cases, the RBI said: “This penalty has been imposed in exercise of powers vested in RBI under the… Banking Regulation Act, 1949. This action is based on the 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.”

Published on May 28, 2020
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