The Reserve Bank has imposed a heavy fine on the public sector Central Bank of India. The bank ignored some rules related to loans and customer protection.
The banking regulator had issued a notice to it. But the Central Bank of India also gave clarifications but the RBI was not satisfied with its answers. RBI has also imposed a fine of Rs 96.4 lakh on Sonali Bank PLC.
The Reserve Bank (RBI) on Friday imposed a fine of Rs 1.45 crore on Central Bank of India for non-compliance of certain instructions related to ‘loans’ and ‘customer protection’. RBI had examined Central Bank of India regarding financial matters till March 31, 2022.
RBI was not satisfied with the answer
The banking regulator said that it had issued a notice to the Central Bank of India. In this, RBI had asked the bank to explain why it should not be fined for not following the instructions. RBI was not satisfied with the reply given by the bank to the show cause notice.
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The bank sanctioned a working capital demand loan to a corporation against the amount it had received as subsidy from the government. It also failed to credit (shadow reversal) the amount involved in certain cases of unauthorised electronic transactions to the customer’s account within the stipulated time.
Sonali Bank PLC also fined
In another press release, RBI said that Sonali Bank PLC has been fined Rs 96.4 lakh for non-compliance with certain norms including KYC Guidelines, 2016. RBI said that in both the cases, the fine has been imposed for negligence in following the rules. This will not have any impact on any transaction of the bank’s customers.
