Reserve Bank of India imposes monetary penalty on fourteen Banks

Case Brief

By orders dated July 06, 2021, RBI imposed monetary penalties on fourteen banks, including Bandhan Bank Ltd., Bank of Baroda, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank Ltd., Karnataka Bank Ltd., Karur Vysya Bank Ltd., Punjab and Sind Bank, South Indian Bank Ltd., State Bank of India, The Jammu & Kashmir Bank Ltd., and Utkarsh Small Finance Bank Ltd. The penalties were imposed for non-compliance with RBI directions on lending to NBFCs, bank finance to NBFCs, loans and advances/statutory and other restrictions, creation of a central repository of large common exposures across banks, CRILC reporting, and operating guidelines for small finance banks, as well as contraventions of Sections 19(2) and 20(1) of the Banking Regulation Act, 1949. RBI stated that the action was based on deficiencies in regulatory compliance and did not pronounce on the validity of transactions or agreements with customers.