The Reserve Bank of India (RBI) has slapped 14 banks with cash penalties due to their non-compliance with certain provisions.
Some of the notable banks which came under the radar of RBI include Bank of Baroda, State Bank of India (SBI).
Other banks include Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, The Jammu & Kashmir Bank and Utkarsh Small Finance Bank.
As per the RBI, the violations include non-compliance with certain provisions of directions issued by RBI on ‘Lending to Non-Banking Financial Companies (NBFCs)’ ‘Bank Finance to Non-Banking Financial Companies (NBFCs)’ and ‘Loans and Advances – Statutory and Other Restrictions’.
Consequently, the RBI had issued notice to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions/contraventions of provisions of Banking Regulation Act, 1949.
Bank of Baroda paying highest amount
The RBI has imposed a total penalty of Rs 14.50 crore, with the BOB paying the highest amount of Rs 2 crore and the SBI receiving the lowest amount of Rs 50 lakhs.
“A scrutiny in the accounts of the companies of a group was carried out by the RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by the RBI and or contravened provisions of the Banking Regulation Act, 1949,” the RBI said in its statement.