RBI imposes Rs 3 cr penalty on IndusInd Bank

The Reserve Bank today said it has imposed a penalty of Rs 3 crore on IndusInd Bank for deficiencies in regulatory compliance.

"A monetary penalty of Rs 30 million on IndusInd Bank" has been imposed for non-compliance with the directions on Income Recognition and Asset Classification (IRAC) norms and contravention of regulatory restrictions pertaining to non- fund based (NFB) facilities, the RBI said 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," the central bank said.

The penalty was imposed yesterday.

Giving details, it said that the statutory inspection of the bank with reference to its financial position as on March 31, 2016 revealed, inter alia, violations of various regulations issued by the RBI in the assessment of non- performing assets (NPAs) and extension of NFB facilities.

A notice was issued to the bank "advising it to show cause as to why penalty should not be imposed" on it for non- compliance with directions issued by RBI.

After considering the banks reply, oral submissions made in the personal hearing, and also the additional information and documents furnished, RBI said it came to the conclusion that the charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty.