RBI fines SBI Rs 1 crore for holding excess shares in borrower companies

SBI allegedly violated the 30% cap on holdings imposed under the Banking Regulation Act

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on the country’s largest lender, State Bank of India, for holding shares in borrower companies of an amount exceeding 30 per cent of the paid-up share capital of those companies.

Sub-section (2) of the Banking Regulation Act, 1949, says that no banking shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding 30 per cent of the paid-up share capital of that company or thirty per cent of its own paid-up share capital and reserves.

“The statutory inspections