RBI action on SBI, fined Rs 1.72 crore; action for not following instructions

The Reserve Bank of India (RBI) has fined the State Bank of India (SBI) for a sum of Rs 1.72 crore. The RBI has fined it for not properly adhering to some of the RBI instructions. RBI has levied this fine under the Banking Regulation Act 1949. RBI has fined SBI in its statement for not properly implementing some of the RBI instructions given in respect of loans and advances, statutory and other restrictions, protection of customers, unauthorized, capping customers' liability in electronic banking transactions and opening current account by banks, requirement for discipline.

In fact, RBI conducted Supervisory Evaluation Statutory Inspection (ISE 2023) regarding the financial position of the bank as of March 31, 2023. During this time it was found that SBI was not following the instructions of RBI. After this, SBI has been issued a notice asking to explain the reason. Along with this, it has also been said that why RBI should not impose a fine on you for not following the instructions. After this, SBI responded to the RBI's notice, then after personal hearing, RBI has imposed a fine on SBI.

State Bank was accused of giving a bridge loan i.e. a kind of temporary loan to an institution (entity), which was given in exchange for subsidy or payment received from the central or state government. Along with this, another allegation was leveled against the bank that it had opened some current accounts in violation of regulatory requirements.

RBI said that this action is based on deficiencies in regulatory compliance. Its purpose is not to question the validity of any transaction or agreement made by the bank with its customers. Apart from this, the monetary penalty has been imposed without prejudice to any other action to be initiated against SBI by the RBI.