Active Stocks
Tue Mar 19 2024 15:58:41
  1. Tata Consultancy Services share price
  2. 3,977.55 -4.03%
  1. Tata Steel share price
  2. 148.65 -0.64%
  1. Bharti Airtel share price
  2. 1,227.85 0.23%
  1. Power Grid Corporation Of India share price
  2. 258.95 -2.28%
  1. ITC share price
  2. 409.50 -1.89%
Business News/ Politics / Policy/  RBI fines 12 banks Rs1.5 crore after scrutiny of Deccan Chronicle account
BackBack

RBI fines 12 banks Rs1.5 crore after scrutiny of Deccan Chronicle account

ICICI Bank was fined the highest at `40 lakh, while IDBI Bank and Axis Bank were both fined `15 lakh each

The Reserve Bank of India fined the banks a sum totalling `1.5 crore after scrutinizing their dealings with Deccan Chronicle Holdings in 2013. Photo: BloombergPremium
The Reserve Bank of India fined the banks a sum totalling `1.5 crore after scrutinizing their dealings with Deccan Chronicle Holdings in 2013. Photo: Bloomberg

Mumbai: The Reserve Bank of India (RBI) on Friday fined 12 banks a sum totalling 1.5 crore after scrutinizing their dealings with publisher Deccan Chronicle Holdings Ltd in 2013.

Twelve private sector and public sector banks—ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, Yes Bank Ltd, State Bank of Hyderabad, Andhra Bank, Canara Bank, Corporation Bank, Ratnakar Bank Ltd and IDBI Bank Ltd—were fined by the central bank, according to an RBI press release.

ICICI Bank was fined the highest at 40 lakh, while IDBI Bank and Axis Bank were both fined 15 lakh each. Andhra Bank, Canara Bank, Corporation Bank, IndusInd Bank, Kotak Mahindra, State Bank of Hyderabad and Yes Bank were fined 10 lakh each.

“Based on the findings of the scrutiny, the Reserve Bank issued showcause notices to these banks in March 2014, to which the individual banks submitted written replies. After considering the facts of each case and the individual bank’s reply, as also, the personal submissions, etc., by some of the banks before its committee of executive directors, the Reserve Bank came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty as determined above," RBI said without giving any more details.

“This action is not intended to pronounce upon the validity of any transaction or agreement entered into between the concerned bank and the borrower," RBI said.

“The penalties are likely because banks must have not followed RBI guidelines on collateral for loans and must have not documented the process of loans to Deccan Chronicle according to RBI norms. Sureties and guarantees on this loans were also a problem so that could be another issue," said a consultant familiar with the case.

He refused to be named because almost all the banks that have been fined are his clients.

Replying to a query by Mint, a Yes bank spokesperson said “We accept our regulator Reserve Bank of India’s final decision in this matter."

“I have not seen or heard of any RBI penalties yet. I cannot comment on it till I see it," said R.K. Dubey, chairman and managing director, Canara Bank.

A senior official at IndusInd Bank stated that the violations are only minor technical issues and not serious lapses. “You can say that by looking at the size of the penalties," he said, requesting anonymity, as he is not authorized to speak to the press.

Requests for comments to ICICI Bank, HDFC Bank, Kotak Mahindra, Ratnakar Bank, Axis Bank did not yield a response.

IDBI Bank, Andhra Bank, Corporation Bank and State Bank of Hyderabad could not be immediately reached.

DCHL is currently under investigation by the Central Bureau of Investigation (CBI) for suspected fraud. The company became laden by debt after expansion into unrelated businesses, including an aviation venture, book store chain Odyssey and the Indian Premier League franchise Deccan Chargers, which was terminated last year after it failed to pay the franchise fee of 100 crore.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 25 Jul 2014, 07:50 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App