Should customers be concerned that the RBI has imposed a penalty on SBI, Bank of Baroda, and 12 other banks?

 

Should customers be concerned that the RBI has imposed a penalty on SBI, Bank of Baroda, and 12 other banks?

The Reserve Bank of India has imposed a total penalty of Rs 14.50 crore, with the Bank of Baroda paying the highest amount of Rs 2 crore and the State Bank of India receiving the lowest amount of Rs 50 lakhs. New Delhi, India: Due to their non-compliance with certain laws, the Reserve Bank of India (RBI) has imposed financial penalties on 14 institutions. Bank of Baroda, State Bank of India (SBI), Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, Jammu & Kashmir Bank, and Utkarsh Small Finance Bank are some of the banks in the state.

According to an IANS report, banks were fined for failing to follow RBI directions on lending to non-banking financial firms, bank funding to non-banking financial companies, loans and advances - statutory and other limits, and other regulations.

The Reserve Bank of India has imposed a total penalty of Rs 14.50 crore, with the Bank of Baroda paying the highest amount of Rs 2 crore and the State Bank of India receiving the lowest amount of Rs 50 lakhs.

"The RBI conducted an examination of the accounts of a group of companies and found that the banks had failed to comply with requirements of one or more of the aforesaid RBI orders and/or had contravened sections of the Banking Regulation Act, 1949," the RBI said in a statement.

The central bank further stated that "to the extent the charges of non-compliance with RBI orders or contraventions of sections of the Banking Regulation Act, 1949 were sustained," the responses submitted by banks will be taken into account.

As a result, the RBI determined that the imposition of a cash penalty on the fourteen banks was justified. "Notices were issued to the banks in furtherance of the same, asking them to show cause why penalty should not be imposed for non-compliance with the directions or contraventions of sections of the Banking Regulation Act, 1949," according to the RBI.

Will the fine have an effect on customers?

The Central Repository of Large Common Exposures, Central Repository of Information on Large Credits (CRILC) reporting in banks, and Small Finance Bank operating norms have all been hacked, according to the RBI.

The RBI further underlined that banks had breached sections 19(2) and 20(1) of the Banking Regulation Act, 1949. Because the fines are imposed on banks for failing to comply with regulatory requirements, the fines will have no effect on the banks' customers.