SBI Slapped With Rs 7-Crore Penalty By RBI For Violating Income Recognition And Asset Classification Norms

A penalty of Rs 7 crore has been imposed on the State Bank of India (SBI) by banking sector regulator Reserve Bank of India (RBI), for non-compliance with regulatory norms.

The norms violated by SBI pertain to Income Recognition & Asset Classification (IRAC) besides sharing of information.

Incidentally, this happns to be one of the highest penalty amounts imposed on any bank in the recent past.

Earlier, it was found that SBI, which is the country’s biggest bank, had also failed to comply with directions on opening and operating current accounts, reporting of data to the Central Repository of Information on Large Credits (CRILC), as well as the reporting of frauds.

The RBI had carried out the statutory inspection to assess SBI’s financial position on March 31, 2017.

The RBI inspection had revealed non-compliance with directions on IRAC norms, sharing of information about customers with other banks, reporting of data, fraud risk management, as well as classification and reporting of frauds.

The RBI had issued a show-cause notice to the SBI after an investigation.

The SBI’s reply as well as oral submissions failed to convince the RBI which arrived at the conclusion that charges of non-compliance were substantiated and warranted imposition of monetary penalty.

The RBI stated that the penalty has been imposed on SBI in exercise of powers vested under various sections of the Banking Regulation Act, 1949.