RBI imposes monetary penalties on SBI, Standard Chartered Bank

The Reserve Bank of India (RBI) on Monday imposed a monetary penalty of Rs 1 crore on the State Bank of India (SBI) and Rs 1.95 crore on Standard Chartered Bank - India for non-compliance with directions and guidelines issued by the central bank.

The penalty on SBI has been imposed for non-compliance with the directions contained in 'Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016', RBI said in a statement.

The penalty on Standard Chartered Bank has been imposed for not complying with directions issued by the RBI on 'Customer Protection - Limiting Liability of Customers in Unauthorised Electronic Banking Transactions', 'Cyber Security Framework in Banks', 'Credit Card Operations of banks' and Code of Conduct in Outsourcing of Financial Services by banks', among others, the central bank said in a separate statement.

After finding non-compliance with its directions by the banks, the central bank had issued separate notices to them asking to show cause why penalty should not be imposed on them.

After considering replies from SBI and Standard Chartered Bank, oral submissions made during personal hearing, and additional submissions made by the lenders, the RBI came to the conclusion that the charge of contravention of non-compliance with various norms was substantiated

The RBI added that the violations warranted imposition of monetary penalty to the extent of non-compliance with the aforesaid directions.

The monetary penalty has been imposed in exercise of powers vested in the RBI under the Banking Regulation Act, 1949.

"This 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 RBI said.

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