Reserve Bank of India imposes monetary penalty on eleven banks

Case Brief

By an order dated July 31, 2019, RBI imposed penalties on eleven banks for non-compliance with the Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) Directions, 2016. The banks included Bank of Baroda, Corporation Bank, Federal Bank Limited, Indian Overseas Bank, Jammu & Kashmir Bank Limited, Oriental Bank of Commerce, Punjab & Sind Bank, Punjab National Bank, State Bank of India, UCO Bank, and United Bank of India. RBI found that the banks had delayed or not reported fraud to the regulator immediately, despite being advised to do so in the backdrop of CBI-initiated criminal proceedings. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.