The Reserve Bank conducted a supervisory evaluation of the bank’s financial position as of March 31, 2021 through a statutory inspection.
Upon examination of the reports, it was found that the public sector lender did not report certain accounts as fraud to the RBI within seven days of the Joint Lenders’ Forum (JLF) decision to declare them as such.
Furthermore, the bank charged its customers for SMS alerts on a flat basis instead of the actual usage basis.
In response to these findings, the RBI issued a notice to the bank, requesting an explanation as to why a penalty should not be imposed for non-compliance with the directives.
After considering the bank’s response and oral submissions made during the personal hearing, the RBI concluded that the bank had indeed failed to comply with the aforementioned directives, leading to the imposition of a monetary penalty, as stated by the central bank.
However, the RBI clarified that the imposed penalty is solely based on the deficiencies in regulatory compliance and should not be interpreted as a judgment on the validity of any transactions or agreements made by the bank with its customers.
