After imposing a penalty on Axis Bank and Indian Overseas Bank (IOB) for non-compliance, the Reserve Bank of India on Wednesday said that it has imposed a monetary fine of Rs 40 lakh on the country's biggest lender the State Bank of India over counterfeit notes.
After imposing a penalty on Axis Bank and Indian Overseas Bank (IOB) for non-compliance, the Reserve Bank of India on Wednesday said that it has imposed a monetary fine of Rs 40 lakh on the country’s biggest lender the State Bank of India over counterfeit notes.
The central bank said that it has imposed the “monetary penalty of Rs 4 million on State Bank of India (the bank) for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes”. The RBI said that it had inspected chest of two branches of the bank and found a violation of the instructions on Detection and Impounding of Counterfeit Notes.
On the revelation, the bank issued a notice asking the SBI to show cause as to why the penalty for the violation should not be imposed on January 5. “After considering the bank’s reply and oral submissions made in the personal
hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty,” the RBI said in the statement.
The RBI imposed the fine under the provisions of Section 47A (1) (c) along with Section 46(4) (i) of the Banking Regulation Act, 1949.
On Monday, the RBI had also imposed a fine of Rs 3 crore and Rs 2 crore on Axis Bank and Indian Overseas Bank for not complying with the known your customer (KYC) regulations. The RBI, in an inspection, found Axis Bank in violation of many regulations in the assessment of non-performing assets (NPAs). The penalty on IOB was imposed when the central bank found fraud at one of its branches.
While SBI and IOB are state-run banks, Axis Bank is a private bank. RBI on Tuesday also announced infusing Rs 1 lakh crore in the banking system via long-term financial instruments. (Read full story)