RBI has imposed a penalty of ₹1.3 crore on State Bank of India and ₹1.62 crore on Indian Bank for non-compliance with guidelines on ‘Loans and Advances – Statutory and Other Restrictions’.
The statutory Inspection of the banks for FY21 revealed that they had sanctioned a term loan to a corporation in lieu of or to substitute budgetary resources envisaged for certain projects and without undertaking due diligence on the viability and bankability of the projects. Further, the repayment/servicing of the loan was made out of budgetary resources.
SBI also violated norms on ‘Management of Intra-Group Transactions and Exposures’ wherein it failed to adhere to the intra-group exposure limit, as it did not consider the intra-day limit sanctioned to its group entity for the purpose of computing intra-group exposure limit, the central bank said.
Indian Bank defaulted on guidelines under ‘Know Your Customer (KYC) Directions, 2016’ and ‘Interest Rate on Deposits Directions, 2016’. The bank allowed operations and did not close several accounts opened using OTP based e-KYC in non-face-to-face mode, even after expiry of one year without conducting customer due diligence procedure, and opened several savings accounts in the names of customers not eligible to maintain savings deposit account.
RBI also fined Punjab & Sind Bank ₹1 crore for breach of norms on ‘The Depositor Education and Awareness Fund Scheme’ as the bank failed to credit eligible amount to Depositor Education and Awareness Fund within the period prescribed under Section 26A of the BR Act.
A penalty of Rs 8.8 lakh has also been imposed on Fedbank Financial Services, the NBFC arm of Federal Bank, as the company reported a fraud to RBI with delay.