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RBI imposes Rs 1 crore fine on SBI for deficiencies in regulatory compliance
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The penalty was imposed after an inspection found that the bank had held shares in borrower companies, as pledgee, of an amount exceeding 30% of paid-up share capital of those companies in contravention of RBI guidelines.
RBI imposes Rs 1 crore fine on State Bank of India.
New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on the State Bank of India for deficiencies in regulatory compliance.
"The Reserve Bank of India (RBI) has, by an order dated November 16, 2021, imposed a monetary penalty of ₹1.00 Crore (Rupees One Crore only) on State Bank of India (the bank) for contravention of sub-section (2) of section 19 of the Banking Regulation Act, 1949 (the Act). This penalty has 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 Act," the banking regulator said in a statement.
"The Statutory Inspections for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial positions as on March 31, 2018 and March 31, 2019 and the examination of the Risk Assessment Reports, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, contravention of sub-section (2) of section 19 of the Act to the extent the bank held shares in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies," RBI said.
The fine was levied after taking into account submissions by SBI, RBI said.
The action by RBI is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI said.
SBI shares closed 4.09% lower on Friday at Rs 470.50, underperforming the sector benchmark Nifty Bank, which settled 3.58% lower.
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