RBI slaps fines on State Bank of India and Standard Chartered Bank
The Reserve Bank of India (RBI) on Monday imposed a monetary penalty of Rs 1 crore on the State Bank of India (SBI) and a Rs 1.95 crore fine on Standard Chartered Bank for the violation of various guidelines.
The fine levied on the SBI is for non-compliance with the directions contained in ‘Reserve Bank of India (frauds classification and reporting by commercial banks and select FIs) directions 2016’, the RBI said in a statement.
In a separate statement, the RBI imposed a Rs 1.95 crore penalty on Standard Chartered Bank for non-compliance of the directions issued by the RBI on ‘Customer protection – limiting liability of customers in unauthorised electronic banking transactions’, ‘cyber security framework in banks’, ‘credit card operations of banks’ and code of conduct in outsourcing of financial services by banks’ among others, the central bank said in a statement.
These monetary penalties have been imposed in exercise of powers vested in the RBI under the Banking Regulation Act, 1949, it said.
These actions are based on the deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, it added.
After considering replies from both banks to the notices, oral submissions made during the personal hearing, and additional submissions made by the lenders, it said the RBI came to the conclusion that the charge of contravention of/ non-compliance with various norms were valid.