Penalty has been imposed in exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949, the central bank said
The Reserve Bank of India (RBI) on Monday said it has imposed a penalty of ₹3 crore on ICICI Bank for contravention of certain directions on prudential norms for classification, valuation and operation of investment portfolios by banks.
Penalty has been imposed in exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949, the central bank said in a release
“This action is based on 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," according to a central bank statement.
This penalty has been imposed in exercise of powers vested with RBI under the provisions of Banking Regulation Act, it added.
RBI said the statutory inspection of the bank with reference to its financial position as on 31 March 2017 and 31 March 2018 and the Risk Assessment Reports (RARs) pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to its employees in the form of commission, revealed, inter alia, contravention of the provisions of the Act and aforesaid specific directions issued by RBI.
In furtherance to the same, RBI said, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the provisions of the Act/ specific directions.
After considering the bank’s replies 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 charges were substantiated and warranted imposition of monetary penalty, the statement said.