The Reserve Bank of India (RBI), the central bank of the country, has imposed monetary penalties on 14 banks for violating certain regulations.
The banks were fined for non-compliance with certain provisions on Lending to Non-Banking Financial Companies (NBFCs), Bank Finance to NBFCs, and Loans and Advances – Statutory and Other Restrictions among other norms.
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After identifying the non-compliance, RBI issued show cause notices to all 14 banks. Based on their responses, the central bank determined the quantum of penalty.
Bank of Baroda was fined INR20m ($268,444), while the State Bank of India will pay INR5m as penalty.
RBI imposed a penalty of INR10m on Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab and Sind Bank, South Indian Bank, The Jammu & Kashmir Bank and Utkarsh Small Finance Bank for similar lapses.
In a statement, RBI said: “The penalties have been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1), of the Banking Regulation Act, 1949, as applicable.
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By GlobalData“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 banks with their customers.”
Recently, RBI expressed concerns that the growing presence of big tech companies in the financial services may threaten competitiveness in the sector.
