Reserve Bank of India (RBI) has penalized the country’s largest lender State Bank of India (SBI) for not complying with specific directions, and has imposed a fine of ₹ 1 crore on it. The Reserve Bank of India (RBI) on 18th October, 2021 said it has imposed a penalty of Rs 1 crore on the State Bank of India (SBI) for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016.
The Reserve Bank of India (RBI) said in a statement that “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 bank with its customers”. The Central Bank further added that the monetary penalty has been imposed in exercise of powers vested in RBI under the Banking Regulation Act, 1949.
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 bank with its customers, it added.
The RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions
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Reserve Bank of India (RBI) on the same day i.e., on 18th October, 2021 has imposed Rs 1.95 crore fine on Standard Chartered Bank for its failure to report a cyber security incident under the prescribed time frame. The bank also failed to credit the amount involved in the unauthorized electronic transactions apart from other reasons.
The central bank further added that Standard Chartered Bank was penalized also for its non-compliance of RBI’s directions on customer protection. The bank also did not comply with the “limiting liability” of customers in unauthorized electronic banking transactions, cyber security framework in banks, credit card operations of banks along with guidelines on managing risks.
Standard Chartered Bank had also allowed direct sales agents to conduct KYC verifications and failed to ensure the integrity of data submitted in Central Repository of Information on Large Credits (CRILC).
The RBI after considering the bank’s replies to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, came to the conclusion that the charge of contravention and non-compliance with the various provisions warranted imposition of penalty.
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