Mumbai: The Reserve Bank of India (RBI) imposed monetary penalties on State Bank of India (SBI) and Jana Small Finance Bank. The apex bank imposed fines on these lenders for failing to comply with regulatory norms related to lending, customer protection, and account management.
A penalty of Rs 1.72 crore has been imposed on SBI for violating guidelines under ‘Loans and Advances – Statutory and Other Restrictions’, ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’, and ‘Opening of Current Accounts by Banks – Need for Discipline’. The penalty was levied under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
The action follows the central bank’s Statutory Inspection for Supervisory Evaluation (ISE 2023) of SBI as of March 31, 2023. Based on inspection findings and further correspondence, the RBI concluded that SBI had failed to adhere to several regulatory directions. A notice was issued to the bank asking why a penalty should not be imposed, after which the RBI decided to proceed with the monetary penalty.
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In a separate action, the RBI also imposed a penalty of Rs 1 crore on Jana Small Finance Bank for violating certain provisions of the Banking Regulation Act, 1949.
The RBI clarified that in both cases, the penalties are due to deficiencies in compliance and are not intended to question the validity of any customer-related transactions or agreements entered into by the banks.
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