Money & Banking

RBI imposes Rs 4.5-cr penalty on IndusInd Bank for non-compliance with its directions

Our Bureau Mumbai | Updated on October 16, 2020 Published on October 16, 2020

In the latest June quarter, IndusInd Bank delivered 64 per cent fall in net profit led by sharp rise in provisions

The Reserve Bank of India has imposed a monetary penalty of Rs 4.5 crore on IndusInd Bank Ltd for non-compliance with certain provisions of directions issued by it.

In a statement, the central bank said the non-compliance was with respect to certain provisions of directions issued by it on ‘Exposure Norms’, ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’, among others.

RBI also flagged non-compliance of its directions on ‘SPARC (Supervisory Programme for Assessment of Risk and Capital) – Monitoring of Information Submission by bank’, ‘Creation of a Central Repository of Large Common Exposures - Across Banks’ read with directions on ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, and ‘Disclosure in Financial Statements - Notes to Accounts’.

According to the central bank, the statutory inspection of IndusInd Bank with reference to its financial position as on March 31, 2019, and the Risk Assessment Report (RAR) revealed, inter-alia, non-compliance with the directions issued by RBI.

The central bank issued a notice to the bank advising it to show cause as to why penalty should not be imposed for its failure to comply with the directions issued by it.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI decided to impose a monetary penalty on the bank, the central bank said in the statement.

“This penalty has been imposed in exercise of powers vested in RBI under…the Banking Regulation Act, 1949 (the Act).

“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,” RBI said.

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Published on October 16, 2020
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