RBI imposed a fine of 84.50 lakhs on Central Bank, accused of not following the rules
RBI has also issued a show cause notice to the bank imposing a heavy fine of Rs 84.50 on the Central Bank of India. The Reserve Bank had conducted a statutory inspection for supervisory assessment of the bank with reference to its financial position as on March 31, 2021.
The Reserve Bank of India (RBI) today imposed a penalty on the Central Bank of India, one of the country's public sector banks. The RBI said the central bank was not complying with certain provisions of the norms relating to the classification and reporting of fraud.
RBI has imposed a penalty of Rs 84.50 lakh on the Central Bank of India for non-compliance with the provisions of the norms. The Reserve Bank conducted the statutory inspection for supervisory assessment of the central bank with reference to its financial position as on March 31, 2021.
Scrutiny of reports revealed that the Central Bank had failed to report the Joint Lenders' Forum (JLF) accounts as frauds to the RBI within seven days of its decision to declare them as frauds. Further, the bank recovered SMS alert charges from its customers on a flat basis instead of actual usage.
Taking strong action in this matter, RBI issued a show cause notice to the Central Bank and asked why a penalty should not be imposed on it for failure to comply with the directions.
After considering the bank's reply to the show cause notice and the oral submissions made during the personal hearing, RBI decided that the allegation of non-compliance with the aforesaid directions of RBI was substantiated, after which RBI could impose a penalty on the Central Bank.
However, the RBI said the penalty 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.
