Thursday, March 8, 2018

RBI slaps Rs 40 lakh fine on State Bank of India for breach of norms on counterfeit notes

Giving the background for the penalty, the banking regulator said that the currency chest inspection of two branches of SBI revealed, inter alia, violation of the instructions issued by RBI.

Mumbai, March 7: State Bank of India (SBI) has been hit with a monetary penalty of Rs 40 lakh for violating RBI rules on Detection and Impounding of Counterfeit Notes.

“The Reserve Bank of India (RBI) has imposed, on March 01, 2018, a monetary penalty of Rs 4 million (Rs 40 lakh) on State Bank of India (the bank)…This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI said in a statement on its website.

Giving the background for the penalty, the banking regulator said that the currency chest inspection of two branches of SBI revealed, inter alia, violation of the instructions issued by RBI on Detection and Impounding of Counterfeit Notes.

“Based on the inspection report and other relevant documents, a Notice, dated January 05, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI. After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty,” RBI added.

This comes two days after the central bank penalised Indian Overseas Bank (Rs 2 crore) and Axis Bank (Rs 3 crore) for breaching KYC (know your customer) norms and asset classification (NPA) guidelines, respectively.

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