RBI imposes Rs 1 crore penalty on SBI; should customers worry?

RBI has imposed a penalty of Rs 1 crore on State Bank of India (SBI) for deficiencies in regulatory compliance.

New Delhi: Reserve Bank on Friday said 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 by an order dated November 16, 2021, Reserve Bank of India (RBI) said in a statement.

According to the central bank, Statutory Inspections for Supervisory Evaluation (ISE) of SBI was conducted 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".

A show cause notice was issued to the bank. However, customers don't need to worry. 

After considering the bank's reply to the notice, oral submissions, and additional submissions made by the bank, RBI said it came to the conclusion that the charge of contravention of the provisions of the Act was substantiated and warranted imposition of monetary penalty. Also Read: Black Friday sale in India: Check top offers on smartphones, laptops, electronics

RBI said the penalty is based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by SBI with its customers. Also Read: Tomato prices could soften in December with arrival of fresh crop, says Centre