Mumbai, May 10: The Reserve Bank of India (RBI) has penalised the State Bank of India with Rs 1.72 crore for non-compliance with certain directions.

As per a statement from the RBI, the state-owned lender failed to comply certain certain directions issued by RBI on 'Loans and Advances- Statutory and Other Restrictions', 'Customer Protection - Limiting Liability of Customers in Unauthorised Electronic Banking Transactions' and 'Opening of Current Accounts by Banks - Need for Discipline'.

This penalty has been imposed under the Banking Regulation Act, 1949.

A Statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023.

Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank by the RBI, advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.

After considering the bank's reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI decides that the bank deserves imposition of monetary penalty.

The charges against the bank is that it extended a bridge loan to an entity against amounts receivable from the Central / State Government by way of subsidy / reimbursement.

The bank failed to credit (shadow reversal) the amount involved in unauthorised electronic transactions to certain customer accounts within 10 working days from the date of notification by the customer and compensate certain customers within 90 days from the date of receipt of the complaint.

Another charge against the bank was that it opened / maintained certain current accounts in contravention of regulatory requirements.

"The action (against SBI) 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. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank," said the RBI.

(ANI)

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