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RBI Action On Bank: The Reserve Bank of India is the regulator of the banks of the country and keeps taking action on any irregularities found in the banks. From time to time, there are reports of the Reserve Bank taking action against many banks and financial institutions. In the latest news, the Reserve Bank has taken action against another big bank and imposed a fine of lakhs of rupees on it.
Reserve Bank imposed a fine of Rs 59.20 lakh on South Indian Bank
The Reserve Bank of India (RBI) has imposed a penalty of Rs 59.20 lakh on South Indian Bank for non-compliance of certain instructions on interest rates and customer services on deposits in banks. The bank has given this information. An examination was conducted by the Reserve Bank of India for audit assessment of the bank regarding its financial position as on March 31, 2023.
RBI had issued notice to South Indian Bank
The notice was issued to South Indian Bank Limited on the basis of non-compliance with RBI instructions and related correspondence. After considering the bank's response to the notice and the oral submissions made during the personal hearing, RBI found that the allegations made against the bank were well-founded and imposition of monetary penalty was appropriate.
Why was penalty imposed on South Indian Bank?
RBI said South Indian Bank had imposed penalty and charges on some customers for non-maintenance of minimum balance/average minimum balance without informing them through SMS, email or letter. In protest against this, RBI has taken this action against the bank.
What did RBI say?
RBI said that this penalty has been imposed on the basis of deficiencies in statutory and regulatory compliance. It is not intended to affect the validity of any transaction or agreement entered into by the Bank with its customers.