RBI slaps Rs 7 cr penalty on SBI for violating NPA identification, fraud risk management norms

The Reserve Bank of India on Monday said it has slapped a penalty of Rs 7 crore on the country's largest bank SBI for non-compliance with norms related to NPA identification and fraud risk management, among others

Press Trust of India July 16, 2019 12:02:01 IST
RBI slaps Rs 7 cr penalty on SBI for violating NPA identification, fraud risk management norms
  • The penalty has been imposed on the bank for non-compliance of income recognition and asset classification (IRAC) norms, code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC), and fraud risk management and classification and reporting of frauds

  • Based on the inspection report and other relevant documents, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by the RBI

  • The penalty, RBI said, 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

Mumbai: The Reserve Bank of India on Monday said it has slapped a penalty of Rs 7 crore on the country's largest bank SBI for non-compliance with norms related to NPA identification and fraud risk management, among others.

The penalty has been imposed on the bank for non-compliance of income recognition and asset classification (IRAC) norms, code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC), and fraud risk management and classification and reporting of frauds.

RBI slaps Rs 7 cr penalty on SBI for violating NPA identification fraud risk management norms

Representational image. Reuters

Giving details of the case, it said the statutory inspection of SBI with reference to its financial position as on 31 March, 2017, revealed, non-compliance with IRAC norms, sharing of information about customers with other banks, reporting of data on CRILC, fraud risk management, and classification and reporting of frauds.

Based on the inspection report and other relevant documents, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by the RBI.

"After considering the bank's reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," the RBI said.

The penalty, RBI said, 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.

Updated Date:

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