OPEN APP
Home / Companies / News /  RBI imposes monetary penalty on Punjab and Sind Bank for non-compliance

RBI imposes monetary penalty on Punjab and Sind Bank for non-compliance

The penalty was for non-compliance with RBI directions on ‘External Benchmark Based Lending’. (Pradeep Gaur/Mint)Premium
The penalty was for non-compliance with RBI directions on ‘External Benchmark Based Lending’. (Pradeep Gaur/Mint)

  • RBI found non-compliance with the directions issued by RBI, inter-alia, to the extent the bank linked certain floating rate retail loans and floating rate loans to Micro and Small Enterprises, extended by it on or after October 01, 2019, to MCLR instead of an external benchmark.

Listen to this article

The Reserve Bank of India (RBI) on Friday imposed a monetary penalty of 27.50 lakh on a public sector bank, Punjab & Sind Bank for non-compliance with certain directions of the central bank.

The penalty was for non-compliance with RBI directions on ‘External Benchmark Based Lending’.

In a statement, RBI said, "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."

The penalty comes after when RBI had carried out a statutory inspection for Supervisory Evaluation of the bank concerning its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.

RBI found non-compliance with the directions issued by RBI, inter-alia, to the extent the bank linked certain floating rate retail loans and floating rate loans to Micro and Small Enterprises, extended by it on or after October 01, 2019, to MCLR instead of an external benchmark.

However, before penalising the bank, RBI had issued a notice to the lender advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions issued by RBI, as stated therein.

It 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 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, the bank shares closed at 15.30 apiece down by 0.97%.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Close

Recommended For You

×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout