Reserve Bank of India imposes monetary penalty on Tamilnad Mercantile Bank Ltd

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 35 lakh on Tamilnad Mercantile Bank Ltd. by order dated October 24, 2019. The penalty was levied for non-compliance with RBI directions on fraud classification and reporting by commercial banks and select financial institutions, following findings from a statutory inspection for the financial position as on March 31, 2017. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and then concluded that the non-compliance warranted the penalty under the Banking Regulation Act, 1949.