The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹57.75 lakh on Suryoday Small Finance Bank Ltd. (SSFB) for non-compliance with its directions on “frauds classification and reporting by commercial banks and select FIs”.

The examination of the Inspection Report (IR) and all related correspondence pertaining to the Statutory Inspection of the bank (conducted by RBI with reference to its financial position as on March 31, 2019) revealed, inter alia, non-compliance with the aforesaid RBI directions, per a central bank statement.

The non-compliance with the aforesaid directions was to the extent the bank failed to (i) furnish FMR (fraud report) to RBI, with respect to certain cases of fraud, within three weeks of their date of detection, and (ii) refer to State Police authorities certain cases of fraud committed by its staff, RBI said.

In furtherance to the same, the central bank said a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said directions, as stated therein.

“After considering the bank’s reply to the notice and oral submissions made in the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted the imposition of a monetary penalty, to the extent of non-compliance with such directions,” according to the statement.

The central bank said this action is based on the 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.

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