Reserve Bank of India imposes monetary penalty on IDBI Bank Limited

Case Brief

RBI imposed a monetary penalty of Rs 90 lakh on IDBI Bank Limited by order dated April 07, 2022. The penalty was imposed for non-compliance with RBI directions relating to fraud classification and reporting, controls over the payment ecosystem between sponsor banks and co-operative banks/UCBs acting as corporate customers, and the cyber security framework for banks. RBI found that the bank delayed reporting frauds, delayed Flash Reports for frauds involving Rs 5 crore and above, and failed to enforce time restrictions and data access controls for corporate net banking, which resulted in unauthorized debit transactions in the accounts of two co-operative banks. RBI stated that the penalty was based on deficiencies in regulatory compliance and did not pronounce on the validity of customer transactions.