New Delhi: In a major regulatory action, banking sector regulator, the Reserve Bank of India, Monday imposed financial penalties on several Indian and foreign banks and credit information service companies for non-compliance with regulatory norms.
Most of these fines are related to non-compliance with certain provisions of know-your-customer (KYC) norms, and also for non-compliance with certain provisions of the Credit Information Companies (Regulation) Act, 2005 and the Credit Information Companies Rules of 2006 in case of credit information companies.
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One of the most prominent players in the banking sector that has been penalized today is Standard Chartered Bank of India. RBI has slapped a penalty of Rs 30 lakh for non-compliance with its directions on KYC norms. The Statutory Inspection for Supervisory Evaluation (ISE 2021) of the bank was conducted by RBI with reference to its financial position as on March 31, 2021, said the RBI in a statement.
“The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2021 and review of compliance with KYC directions in the bank carried out by RBI and all related correspondence in that regard, revealed, inter-alia, that the bank allotted multiple customer identification code to some of its individual customers,” said the RBI.
The banking sector regulator said that after considering the Standard Chartered Bank of India’s reply, it was decided to impose a penalty of Rs 30 lakh on the bank in exercise of powers vested to RBI under the provisions of section 47A(1) (c) and section 46(4)(i) of the Banking Regulation Act of 1949.
The Reserve Bank also imposed penalties on four credit information companies for non-compliance of certain provisions of Credit Information Companies (Regulation) Act of 2005. These are TransUnion CIBIL Limited, Mumbai; Equifax Credit Information Services; Experian Credit Information Company of India, Mumbai; and CRIF High Mark Credit Information Services, Mumbai.
The Reserve Bank said all these companies have been fined for contravention of certain provisions of Credit Information Companies (Regulation) Act of 2005 and the penalties have been imposed on them after giving them the due opportunity to show cause and make their submissions.
RBI imposes penalty on several cooperative banks
In yet another major regulatory action announced on Monday, the Reserve Bank announced the imposition of financial penalties on several cooperative banks spread across several states. These are Uttar Pradesh Co-operative Bank Ltd, Lucknow; Ujjain Nagarik Sahakari Bank Maryadit, Ujjain; Panihati Co-operative Bank; The Berhampur Co-operative Urban Bank, Odisha; and Solapur Siddheshwar Sahakari Bank, Solapur.
The RBI also imposed penalties on the Uttarpara Co-operative Bank, West Bengal; and Textile Traders Co-operative Bank, Ahmedabad. While a monetary penalty of Rs 28 lakh has been imposed on Uttar Pradesh Co-operative Bank Limited, Lucknow, a penalty of Rs 4.50 lakh has been slapped on Textile Traders Co-operative Bank Ltd., Ahmedabad (Gujarat).
Similarly, the RBI imposed a monetary penalty of Rs 2.5 lakh on the Uttarpara Co-operative Bank Ltd, West Bengal. RBI slapped a fine of Rs 1.50 lakh on Solapur Siddheshwar Sahakari Bank Limited, Solapur (Maharashtra); and a penalty of Rs 1 lakh on the Berhampur Co-operative Urban Bank Ltd., Odisha.
The banking sector regulator imposed a monetary penalty of Rs 2.5 lakh on Panihati Co-operative Bank Ltd, and a penalty of Rs 1 lakh has been imposed on Ujjain Nagarik Sahakari Bank Maryadit, Ujjain, Madhya Pradesh. RBI said that these financial penalties have been imposed for deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities.
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