RBI imposes penalty on ICICI Bank Ltd of over Rs 12 crore
RBI imposes penalty on ICICI Bank Ltd of over Rs 12 crore - Pune Pulse
By: Pune Pulse
October 19, 2023
Pune: The Reserve Bank of India (RBI) has imposed a monetary fine of Rs 12.19 Crore on ICICI Bank Ltd.
As per further information, the RBI has imposed a fine on the bank for contravention of sub-section (1) of Section 20 of the Banking Regulation Act, 1949 (the BR Act) read with directions issued by RBI on ‘Loans and Advances-Statutory and Other restrictions’, sub-section (2) of Section 6 and Section 8 of the BR Act read with directions issued by the RBI on ‘Financial Services provided by the Banks’, and non-compliance with the RBI directions on ‘Frauds classification and reporting by commercial banks and select Fls’. This penalty has been imposed in the exercise of powers vested in RBI conferred under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) of the BR Act.
This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
The Statutory Inspections for Supervisory Evaluation (ISE 2020 and ISE 2021) of the bank were conducted by RBI with reference to its financial position as of March 31, 2020, and March 31, 2021. The examination of the risk assessment reports/inspection reports pertaining to ISE 2020 and ISE 2021, and all related correspondence in that regard, revealed, inter alia, that the bank had (i) sanctioned/committed loans to companies in which two of its directors were also directors, (ii) marketed and engaged in the sale of non-financial product, and (iii) failed to report frauds to RBI within the prescribed timelines. Consequently, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the provisions of the BR Act and the directions issued by RBI, as stated therein.
After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI concluded that the charge of non-compliance with the provisions of the BR Act and the RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
Shreyas Vange
