RBI imposes penalties on SBI, Canara Bank, and City Union Bank. Read to know the reasons

The Reserve Bank of India (RBI) on Monday (February 26) took action against the State Bank of India (SBI), City Union Bank, and Canara Bank for regulatory violations.

Penalty on State Bank of India (SBI):

SBI is facing a fine of Rs 2 crore for contravention of provisions outlined in the Banking Regulation (BR) Act, 1949, and the Depositor Education Awareness Fund Scheme, 2014. The penalty, imposed on February 26, 2024, results from deficiencies in regulatory compliance related to the Depositor Education Awareness Fund Scheme, and it amounts to Rs 2 crore. The RBI invoked its powers under Section 47 A (1) (c) read with Sections 46 (4) (i) and 51 (1) of the BR Act to impose this penalty.

Penalty on City Union Bank:

City Union Bank has been fined Rs 66 lakh by the RBI for non-compliance with specific directives related to ‘Prudential Norms on Income Recognition, Asset Classification, and Provisioning Pertaining to Advances – Divergence in NPA Accounts’ and ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’. The penalty reflects the bank’s failure to adhere to the stipulated norms and regulatory guidelines.

Penalty on Canara Bank:

Canara Bank is subject to a penalty of Rs 32.30 lakh imposed by the RBI. The penalty pertains to non-compliance with directives issued by the RBI on topics such as ‘Data Format for Furnishing of Credit Information to Credit Information Companies and other Regulatory Measures’, ‘Resolution Framework 2.0 – Resolution of COVID-19 related stress of Micro, Small and Medium Enterprises (MSMEs)’, and ‘Resolution Framework – 2.0: Resolution of COVID-related stress of individuals and small businesses’. The penalty highlights the bank’s failure to meet the specified regulatory requirements in these areas.

These penalties underscore the RBI’s commitment to maintaining strict regulatory oversight and ensuring compliance within the banking sector.