The Reserve Bank of India (RBI) imposed a fine on the State Bank of India ( SBI) worth Rs 1 crore on Monday for not complying with fraud classification criteria. The apex bank further stated that an investigation was conducted by it into accounts kept with SBI and it was found out that SBI showed leniency in reporting frauds.
RBI has imposed a monetary penalty of Rs 1 crore on State Bank of India for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016’: Reserve Bank of India (RBI) pic.twitter.com/yZv4EIjh8Q
— ANI (@ANI) October 18, 2021
“A scrutiny was carried out by the RBI in a customer account maintained with the bank and the examination of the scrutiny report and all related correspondence pertaining to the same, revealed non-compliance with the aforesaid directions to the extent of delay in reporting of fraud in the said account to RBI,” the regulator said in a statement.
In addition, it issued a notice to the lender asking it to grant a reason why a penalty should not be imposed on it for not adhering to the stated directives.
“In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for such non-compliance with the said directions. After considering the bank’s reply to the notice and oral submissions made by the bank in the personal hearing, RBI came to the conclusion that the charge of noncompliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions,” the release said.
The lender delayed reporting fraud in the said account to RBI, the release said.