Reserve Bank Slaps Monetary Penalty On PNB, ICICI Bank

The central bank has imposed a monetary penalty of Rs 1.8 crore on Punjab National Bank and Rs 30 lakh on ICICI Bank

The Reserve Bank of India

New Delhi: The Reserve Bank of India (RBI) on Wednesday announced monetary penalty on ICICI Bank and Punjab National Bank (PNB).

The central bank has imposed a monetary penalty of Rs 1.8 crore on Punjab National Bank and Rs 30 lakh on ICICI Bank.

This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).

According to a RBI statement, 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 penalty on ICICI Bank has been imposed for non-compliance with certain directions issued by RBI on ‘Levy of penal charges on non-maintenance of minimum balances in savings bank accounts’ dated November 20, 2014.

According to reports, the RBI inspections revealed non-compliance with the directions to the extent the bank levied charges for non-maintenance of minimum balance in saving accounts, which were not directly proportionate to the extent of the shortfall observed, the central bank said.

Later, the central bank came to the conclusion that the non-compliance with the RBI directions warranted imposition of monetary penalty.

In the case of PNB, the regulatory action is related to the bank’s shareholding in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies, the RBI said.

In furtherance to the same, the central bank said, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with its directions.