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The Reserve Bank of India (RBI) has imposed a penalty of ₹5 crore on South Indian Bank (SIB) for non-compliance with its directions on Income Recognition and Asset Classification (IRAC) norms, Know Your Customer (KYC) norms and treasury function.
The central bank, in a statement, said the penalty has also been imposed on the Thrissur-headquartered private sector bank for deficiencies in its compliance function and compliance culture.
The penalty was imposed by the RBI by an order dated May 14, 2018.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of …the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by RBI.
“This action is based on 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,” the RBI said in a statement.
In the fourth quarter ended March 31, 2018, SIB had reported a 51 per cent jump in net profit at ₹114 crore against ₹76 crore in the year-ago period.
As of March-end 2018, the bank’s deposits increased 9 per cent year-on-year (y-o-y) to ₹72,030 crore and advances were up 17 per cent at ₹55,109 crore.
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