RBI Imposes Monetary Penalty On Seven Banks

The Reserve Bank of India (RBI) has 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, Opening of Current Accounts by Banks - Need for Discipline, Discounting/ Rediscounting of Bills by Banks, Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016, End Use of Funds - Monitoring and Deposits on Balance Sheet Date. These include Allahabad Bank (Rs 2 crore), Bank of Baroda (Rs 1.5 crore), Bank of India (Rs 1.5 crore), Bank of Maharashtra (Rs 2 crore), Indian Overseas Bank (Rs 1.5 crore), Oriental Bank of Commerce (Rs 1 crore) and Union Bank of India (Rs 1.5 crore). The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949, taking into account the failure of the banks to adhere to the aforesaid directions issued by RBI. 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.

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