The Reserve Bank of India (RBI) on Wednesday has imposed a monetary penalty of Rs 1.80 crore on Punjab National Bank and Rs 30 lakh on ICICI Bank Ltd.

For Punjab National Bank, RBI said the action is based on the 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 penalty on ICICI Bank has been imposed for non-compliance with certain directions issued by RBI on ‘Levy of penal charges on non-maintenance of minimum balances in savings bank accounts’ dated November 20, 2014.

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Punjab National Bank

"The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019, and the examination of the Risk Assessment Report, the Annual Review of implementation of Exposure Management Measures for Financial Year 2019-20 carried out by RBI during July 2020 and all related correspondence pertaining to the same, revealed, inter-alia, contravention of sub-section (2) of section 19 of the Act to the extent the bank held shares in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies.

In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the aforesaid provisions of the Act, as stated therein," the central bank said.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank, to the extent of contravention of the aforesaid provisions of the Act.

ICICI Bank

In another statement, RBI said, "The Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2019, and the examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, non-compliance with the aforesaid directions issued by RBI to the extent the bank levied charges for non-maintenance of minimum balance in saving accounts, which were not directly proportionate to the extent of the shortfall observed.

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In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein."

After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.

(Edited by : Jomy Jos Pullokaran)

First Published:Dec 15, 2021 6:06 PM IST