Mumbai: The Reserve Bank of India informed on Friday that it has imposed a penalty of Rs 1 crore on State Bank of India (SBI) for deficiencies in regulatory compliance. The penalty has been imposed and a show cause notice was issued to the bank, by an order dated November 16, 2021.
The central bank said that Statutory Inspections for Supervisory Evaluation (ISE) of SBI was held with reference to its financial positions as on March 31, 2018 and March 31, 2019. ‘The examination of the risk assessment reports, inspection report and all-related correspondence pertaining to the same revealed contravention of a provision of Banking Regulation 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’, Reserve Bank said in an official statement.
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After considering the bank’s response to the notice, along with its oral submissions and additional submissions, RBI came to the conclusion that the charge of contravention of the provisions of the Act was substantiated and warranted imposition of monetary penalty. The central bank added that the penalty is based on deficiencies in regulatory compliance, and was not anticipated to pronounce upon the validity of any transactions or agreements entered into by the State Bank with its customers.
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