The Reserve Bank of India (RBI) has penalized the State Bank of India (SBI) with a fine of Rs 2 crore, citing violations of regulatory compliance under the provisions of the Banking Regulation Act. The RBI clarified that the penalty is focused on compliance issues and does not question the validity of SBI’s transactions or agreements with its customers.
This decision followed an RBI inspection assessing SBI’s compliance, financial health, and supervisory status as of March 31, 2022. The inspection revealed that SBI had pledged shares exceeding thirty percent of the paid-up share capital of various companies and failed to deposit the requisite funds into the Depositor Education and Awareness Fund within the mandated timeframe.
Canara Bank also faced a fine, amounting to Rs 32.30 lakh, for not adhering to specific RBI directives. These include the proper formatting of credit information for Credit Information Companies, adherence to the ‘Resolution Framework 2.0’ for addressing COVID-19 related stress in Micro, Small, and Medium Enterprises (MSMEs), and compliance with the resolution framework for individuals and small businesses affected by COVID-19.
The RBI’s action against Canara Bank aims to address lapses in regulatory compliance, without making judgments on the bank’s client transactions or agreements.
