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RBI imposes monetary penalty on Central Bank of India. Details here

The bank received a penalty for non-compliance with certain directions issued by RBI on ‘Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions'. (Pradeep Gaur/Mint)Premium
The bank received a penalty for non-compliance with certain directions issued by RBI on ‘Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions'. (Pradeep Gaur/Mint)

  • This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI said in a statement.

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The Reserve Bank of India (RBI) has imposed a monetary penalty of 36 lakh on the government-owned Central Bank of India for non-compliance with certain directions issued by the central bank.

The bank received a penalty for non-compliance with certain directions issued by RBI on ‘Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions'.

"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," RBI said in a statement.

RBI had conducted a statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondences pertaining to the same.

The inspection resulted in non-compliance with the aforesaid directions to the extent the bank failed to credit (shadow reversal) the amount involved in the unauthorized electronic transaction to the customer’s account within 10 working days from the date of notification by the customer.

Following this, RBI has issued a notice to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said directions, as stated therein.

RBI on Friday said, 'After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforesaid charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions."

On BSE, Central Bank of India shares finished at 19.60 apiece down by 1.3%.

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