The Reserve Bank of India on Tuesday stated that it has imposed a financial penalty of Rs 2 crore on State Bank of India (SBI) for contravention of some provisions of the Banking Regulation Act, 1949, and particular instructions of the RBI issued to the bank on payment of remuneration to staff in the form of commission.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the central bank stated, with out providing details of particular transactions.
The RBI stated that the statutory inspection of the bank with reference to its monetary position as on March 31, 2017, and March 31, 2018, and the risk assessment reports (RARs) pertaining to the identical resulted in a discovery of the contravention. The regulator additionally carried out an examination of the correspondence with the bank relating to fee of remuneration to its staff within the type of commission to reach at its resolution.
After this, a discover was issued to the bank advising it to indicate trigger as to why penalty shouldn’t be imposed for contravention of the provisions of the Act and particular instructions issued by RBI. After contemplating the bank’s replies to the discover, oral submissions made within the private listening to and examination of extra submissions made by it, the RBI got here to the conclusion that the costs have been substantiated and warranted imposition of monetary penalty.