Reserve Bank of India (RBI) imposed monetary penalties of Rs 5 crore on four public sector banks (PSBs) for violation of various banking norms. These four PSBs are Corporation Bank (Rs 2 crore) and State Bank of India (Rs 1 crore), Bank of Baroda (Rs 1 crore) and Union Bank of India (Rs 1 crore).
Reasons for imposition of penalties
Non-compliance with various directions issued by RBI on monitoring of end use of funds, exchange of information with other banks, classification and reporting of frauds and on restructuring of accounts.
These penalties were imposed by RBI in exercise of powers vested in on it under provisions of Section 47A(1)(c) read with Section 46(4)(i) of Banking Regulation Act, 1949, taking into account failure of above banks to adhere to directions issued by it. They are based on deficiencies in regulatory compliance and are not intended to pronounce upon validity of any transaction or agreement entered into by banks with their customers.