RBI fines IDBI Bank Rs 3 crore for failing to report NPAs
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It also said that the action is based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
For FY16, IDBI Bank had under-reported Rs 6,186 crore of bad loans, which were subsequently identified by the RBI. The central bank’s rules require that lenders make public the divergence if the defaults identified by the RBI are more than 15% of what is reported by the lender. Around a fourth of IDBI Bank’s loans have turned bad and the bank is already facing prompt corrective action from the RBI.
IDBI Bank is the latest in a series of lenders to be fined by the RBI for divergence between bad loans reported by the lender and those identified by the central bank in subsequent inspections. The RBI had earlier imposed a Rs 3-crore penalty on Axis Bank for similar non-reporting of NPAs in FY16.
In October, it had penalised Yes Bank Rs 6 crore for non-compliance of norms related to classification of NPAs. These penalties pertain to violations in the previous fiscal. In FY17, too, banks had reported divergence in bad loans, which means that more penalties are likely to follow. #casansaar (Source - Times of India)
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