Shares of ICICI Bank and Punjab National Bank edged lower in trade today after the Reserve Bank of India imposed a monetary penalty on the two lenders for non-compliance with certain regulations.
ICICI Bank fell 1.51% to Rs 741.25 while Punjab National Bank fell 0.88% to Rs 39.40.
The Nifty 50 was up 0.20% to 17,255.90. The Nifty Bank index, however, was trading 0.68% lower at 36,540.50.
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.80 crore on Punjab National Bank for contravention of certain section of the Banking Regulation Act, 1949 (the Act).
PNB had held shares in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies.
The RBI had issued a notice to the bank, advising it to show cause as to why penalty should not be imposed on it for contravention of the provisions of the Act.
After considering the bank's reply to the notice, RBI came to the conclusion that the charge of contravention of the provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank.
In the case of ICICI Bank, the RBI has imposed a monetary penalty of Rs 30 lakh, after conducting a statutory inspection for supervisory evaluation of the bank.
The central bank found that the private lender had not been complying with the directions related to levy of charges for non-maintenance of minimum balance in saving accounts.
In both cases, RBI clarified that the fines were charged for non-compliance with Banking regulations and not on accounts of any transaction or agreement made between the banks and their respective clients.
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