RBI fines SBI, Canara Bank for breach of rules

Mumbai, Feb 26 (SocialNews.XYZ) The Reserve Bank of India (RBI) announced on Monday that it has imposed penalties on the State Bank of India (SBI) and Canara Bank for non-compliance with banking regulations and RBI directions.

The RBI in an order dated February 26 slapped a penalty of Rs 2 crore on State Bank of India for contravention of provisions of the Banking Regulation Act and not complying with the Depositor Education Awareness Fund Scheme.

The RBI said that an examination of the Risk Assessment Report/Inspection Report revealed, inter alia, that SBI held shares as pledgee of an amount exceeding 30 per cent of paid-up share capital of certain companies and also failed to credit eligible amount to the Depositor Education and Awareness Fund within the period prescribed in the BR Act.

Similarly, the RBI has imposed a penalty of Rs 32.30 lakh on Canara Bank for non-compliance with certain directions issued by the central bank on 'Data Format for Furnishing of Credit Information to Credit Information Companies and other Regulatory Measures'.

The RBI said that an examination of the Risk Assessment Report/Inspection Report and all related correspondences in the case of Canara Bank revealed, inter alia, non-compliance with the aforesaid directions by the bank, to the extent it (i) failed to rectify the rejected data and upload the same with the Credit Information Companies (CICs) within seven days of receipt of such rejection report from the CICs, and (ii) restructured certain accounts which were not standard assets as on March 31, 2021 under the extant directions.

However, RBI also said this action is based on the deficiencies in regulatory compliance of the two banks and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Source: IANS