India’s central bank, Reserve Bank of India (RBI) has imposed a fine of Rs 40 lakh for not following its direction of counterfeiting notes in the biggest lending bank, State Bank of India (SBI).
In a statement, the central bank said,” Monetary penalty of Rs 4 million on State Bank of India (the bank) for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes.”
The RBI said that they inspected two branches of the bank where they found a violation of instructions on Detection and impounding of Counterfeit Notes.
The bank has issued a notice asking the SBI as to why the penalty for the violation should not be imposed on January 5. The monetary body said,” After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty.”
The fine was imposed under the provisions of Section 47A (1) along with Section 46 (4) (i) of the Banking Regulation Act, 1949.
Earlier on Monday, the RBI had penalized private sector player Axis Bank and the govt. owned Indian Overseas Bank (IOB) for not following its guidelines. RBI charged Rs 3 crore to Axis Bank while Rs 2 crore to IOB for non-compliance with KYC regulations.
Axis Bank was found violating its assessments in NPAs while IOB was found of fraud in one of its bank branches.
RBI on Tuesday announced infusing Rs 1 Lakh in the banking system via long-term financial instruments.