The Reserve Bank of India (RBI), the central bank of the country, has penalised seven public sector lenders for breaching norms on current account opening.
The seven banks will pay a combined penalty of INR110m ($1.56m) for violating the RBI regulations.
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In a statement, RBI said that the banks were fined for breaching certain provisions of ‘Code of Conduct for Opening and Operating Current Accounts, Opening of Current Accounts by Banks – Need for Discipline, Discounting/ Rediscounting of Bills by Banks and Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016.
The banks were also found to have violated certain provisions of ‘End Use of Funds – Monitoring’ and ‘Deposits on Balance Sheet Date’.
Allahabad Bank and Bank of Maharashtra were fined INR20m each. Bank of Baroda, Bank of India, Indian Overseas Bank and Union Bank of India will pay INR15m individually.
Oriental Bank of Commerce will pay INR10m as fine.
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By GlobalDataRBI imposed the monetary penalty following overall scrutiny over such breaches. The central bank also issued a show cause notice to the violators on why penalty should not be imposed for such non-compliance.
After assessing the replies from the banks, RBI determined that the charges of non-compliance sustain, and announced the quantum of penalties.
Separately, the central bank imposed a penalty of INR10m on Corporation Bank for flouting certain directions on cyber security framework in banks.
