The Reserve Bank of India (RBI) announced on Friday that it had imposed a penalty of Rs.84.50 lakh on the Central Bank of India (the bank) for failing to comply with certain provisions of norms relating to fraud classification and reporting.
The Reserve Bank conducted a statutory inspection to conduct a supervisory evaluation of the bank’s financial position as of March 31, 2021.
According to the reports, the public sector lender failed to report certain accounts as fraudulent to the RBI within seven days of the Joint Lenders’ Forum (JLF) decision to declare the accounts fraudulent.
It recovered SMS alert charges from customers on a flat rate rather than on an individual basis.
The bank had received a notice from the RBI instructing it to justify why a penalty should not be levied against it for failing to follow the instructions.
The central bank stated: “After taking into account the bank’s response to the notice and oral arguments made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.
The Reserve Bank added that the fine is based on regulatory compliance issues and is not meant to question the legality of any agreements or transactions the bank has with its clients.
