Reserve Bank of India imposes fines on 3 banks for violation of rules

Mangalore Today News Network

New Delhi, May 29, 2020: On Thursday, RBI (Reserve Bank of India) imposed monetary penalties on three banks for various rule violations. The central bank imposed fines of Rs 1.2 crore on Karnataka Bank, Rs 5 crore on Bank of India (BoI) and Rs 30 lakh on Saraswat Co-operative Bank for non-compliance with certain provisions related to income recognition, asset classification and provisioning pertaining to NPA (non-performing accounts)Yahoo reported.

 

RBI said that penal action was taken after inspection of the banks and issuing show-cause notices. These periodical checks of books of the banks are conducted by the central bank for possible violations or irregularities in transactions.

Shares of Karnataka Bank and BoI were trading lower on Friday in trade.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46 (4) (i) and 51 (1) of the Banking Regulation Act, 1949 (the Act). 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," RBI said with regard to BoI’s penalty.