The banks were found not complying with rules on operating current accounts
Allahabad Bank and Bank of Maharashtra have been imposed a fine of ₹2 crore each
Mumbai: The Reserve Bank on Friday said it has imposed a collective penalty of ₹11 crore on seven public sector banks for violating norms on current account opening.
Allahabad Bank and Bank of Maharashtra have been imposed a fine of ₹2 crore each, Bank of Baroda, Bank of India, Indian Overseas Bank and United Bank of India have been slapped with fines of ₹1.5 crore each, while Oriental Bank of Commerce has been imposed with a penalty of ₹1 crore.
"The Reserve Bank of India (RBI) has, by an order dated July 31, 2019, imposed monetary penalty on seven banks for non-compliance with certain provisions of directions issued by RBI on 'Code of Conduct for Opening and Operating Current Accounts'," RBI said in a release.
It said the penalties have been imposed in exercise of powers vested in the central bank under the provisions of the Banking Regulation Act, 1949.
"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 banks with their customers," the regulator added.
RBI said it carried out a scrutiny of the accounts of companies of a group and it was observed that the banks had failed to comply with provisions of one or more of the directions issued by it.
Based on the findings of the scrutiny, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the replies received from the banks, oral submissions made in the personal hearings and examination of additional submissions, the central bank "came to the conclusion that the said charges of non-compliance with RBI directions were sustained and warranted imposition of monetary penalty on aforementioned seven banks, based on the extent of non-compliance in each bank".
In a separate release, RBI said it has imposed a fine of ₹1 crore on Corporation Bank for non-compliance of norms related to cyber security framework for banks, and frauds classification and reporting.
"RBI has imposed, by an order dated July 31, 2019, monetary penalty of ₹1 crore on Corporation Bank. 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.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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