RBI imposes monetary penalty on 4 banks

The Reserve Bank of India (RBI), on Friday, said it has imposed a monetary penalty on Citibank (₹4 crore), Bharat Co-operative Bank (₹60 lakh), TJSB Sahakari Bank (₹45 lakh), and Nagar Urban Co-operative Bank (₹40 lakh).

The central bank, in a statement, said it has imposed the penalty on Citibank“for contravention of…Banking Regulation Act, 1949 and for non-compliance with the directions issued by RBI on obtaining declaration from customers about credit facilities enjoyed with other banks, granting non-fund based facilities to non-constituent borrowers…”

As per the statement, the fine on the foreign bank is also for non-compliance with the directions issued by RBI on verifying data available in Central Repository of Information on Large Credits (CRILC) database and obtaining No-Objection Certificate (NOC) from lending banks at the time of opening current accounts, and submission of compliance to risk assessment findings.

In the case of Mumbai-based Bharat Co-operative Bank, the RBI imposed the penalty for non-compliance with directions issued by it on Income Recognition and Asset Classification (IRAC) norms and Frauds - classification and reporting.

In the case of Thane (Maharashtra)-based TJSB Sahakari Bank, the RBI imposed the penalty TJSB Sahakari Bank for non-compliance with directions issued by it on IRAC norms.

In the case of Ahmednagar (Maharashtra)-based Nagar Urban Co-operative Bank, the RBI imposed the penalty for non-compliance with directions issued by it on IRAC norms, Management of Advances and Exposure Norms & Statutory/Other Restrictions.

In all four cases, the central bank said: “ “This penalty has been imposed in exercise of powers vested in RBI under the… Banking Regulation Act, 1949….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.”