Reserve Bank of India (RBI), the central banking authority of the country, has fined state-owned lenders Corporation Bank and Allahabad Bank for breaching norms.
Corporation Bank was fined INR20m ($281,020), while Allahabad Bank was fined INR15m ($210,765) due to non-adherence to RBI regulations.
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Indian banks penalised: Details
In a regulatory filing, Corporation Bank said that it was fined for failing to monitor end use of funds and lapses in exchange of information with other lenders in respect of one borrower.
RBI penalised the lender under 47(A)(1)(c) read with the Section 46(4)(i) of the Banking Regulation Act, 1949, the statement added.
Allahabad Bank is also fined for similar failures.
In a separate regulatory filing, the bank stated that it is fined for ‘not monitoring the end use of funds, delay in classification and reporting of fraud and non-adherence with RBI guidelines during restructuring of accounts in respect of one of its borrowers’.
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By GlobalDataBoth the banks added that they have taken appropriate measures to prevent such incidents in the future.
Corporation Bank is headquartered in Mangalore, while Allahabad Bank has its head office in Kolkata.
The decision comes within a week after the UCO Bank, Axis Bank and Syndicate Bank were fined for violating norms. The gross penalty on the three banks amounted to INR52m ($730,626).
