RBI Slaps Penalty of Rs. 84.50 Lakh on Central Bank for Regulatory Non Compliance
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RBI exercised its powers granted under section 47 A (1) (c) in conjunction with sections 46 (4) (i) and 51 (1) of the Banking Regulation Act, 1949, to levy the penalty.
It is important to note that this penalty is a result of regulatory compliance shortcomings and should not be interpreted as a judgment on the validity of any transactions or agreements entered into by the bank with its customers.
The RBI’s action followed the Statutory Inspection for Supervisory Evaluation (lSE) conducted on Central Bank of India. The inspection, based on the bank’s financial position as of March 31, 2021, revealed instances of non-compliance with the aforementioned directions. Specifically, the bank failed to report certain accounts as fraud to RBI within seven days of the Joint Lenders’ Forum (JLF) decision, and it also levied SMS alert charges on customers based on a flat rate instead of actual usage.
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