RBI Imposes Penalties on Citibank, Bank of Baroda, and Indian Overseas Bank for Non-Compliance
The Reserve Bank of India (RBI) has taken strict action against Citibank, Bank of Baroda, and Indian Overseas Bank for their failure to comply with regulatory norms. On November 24, the RBI imposed penalties totaling ₹10.34 crore on these banks due to their violations.
Clarification from the RBI
The RBI has clarified that the penalties are a result of deficiencies in regulatory compliance and should not be interpreted as an indication of the validity of any transactions or agreements made by the banks with their customers.
Penalties Imposed by the RBI
According to three separate notifications issued by the RBI, Indian Overseas Bank has been fined ₹one crore for non-compliance with specific directions related to “loans and advances – statutory and other restrictions.” Citibank has been penalized ₹5 crore for various non-compliance issues, including the violation of operational guidelines, risk management, and code of conduct in outsourcing financial services, as well as non-compliance with the depositor education and awareness fund scheme of 2014.
The Bank of Baroda has been subjected to a penalty of ₹4.34 crore for failure to comply with directions regarding “loans and advances – statutory and other restrictions,” as well as the Reserve Bank of India’s guidelines on interest rates for deposits in 2016.
Actions Against Co-operative Banks
In addition to penalizing the aforementioned banks, the RBI has also taken action against five co-operative banks for their non-compliance with regulatory requirements. These banks are Shri Mahila Sewa Sahakari Bank Ltd, Porbandar Vibhagiya Nagarik Sahkari Bank Ltd, Sarvodaya Nagarik Sahkari Bank Ltd, The Khambhat Nagarik Sahkari Bank Ltd, and The Vejalpur Nagarik Sahkari Bank Ltd.
The penalties imposed on these co-operative banks by the RBI are as follows: ₹2.50 lakh for Shri Mahila Sewa Sahakari Bank Ltd in Ahmedabad, ₹2 lakh for Porbandar Vibhagiya Nagarik Sahkari Bank Ltd, ₹1 lakh for Sarvodaya Nagarik Sahkari Bank Ltd in Himmatnagar, ₹50,000 for The Khambhat Nagarik Sahkari Bank Ltd, and ₹25,000 for The Vejalpur Nagarik Sahkari Bank Ltd.
Maintaining Regulatory Compliance
The RBI’s penalties serve as a reminder to banks and co-operative institutions about the importance of adhering to regulatory guidelines. It is crucial for financial institutions to ensure that they comply with all relevant directions issued by the RBI to maintain the integrity of the financial system and protect the interests of their customers.
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