The ICICI bank was fined 58.9 by India’s monetary body Reserve Bank of India (RBI) on Thursday for failing to comply with maturity guidelines.
The RBI in a press release said that it has imposed a penalty of Rs 589 million on the private player for failing to adhere to its directions on direct sale of securities from its HTM portfolio.
Without elaborating much on how banking system failed in its norms, The RBI said “The penalty has been imposed in exercise of power vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions/guidelines issued by the RBI.
This action is based on the deficiencies in regulatory compliance and it is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.” RBI added.
The Banks should disclose the amount of securities kept under the HTM segment under which the papers are held until maturity. It cannot be used for intraday trading. The RBI allows banks to sell securities from HTM subject to certain limits and disclosure rules.
This is the highest penalty imposed by India’s central bank on a bank for a single incident.
The shares of the ICICI Bank were down by 2% to Rs 278 in early hours of trade in the BSE Sensex on Thursday.
Earlier this month, Axis Bank and Indian Overseas Bank were fined in crores for failing RBI guidelines. SBI was also charged Rs 40 lakhs.