RBI slaps fine on eight public sector banks for violating norms

The Reserve Bank of India (RBI) imposed monetary penalty ranging between Rs 1-2 crore on eight public sector banks for violating norms on fraud classification, bill discounting and monitoring of end use of funds.

Bank of Baroda, Bank of India, Indian Overseas Bank and Union Bank of India were fined Rs 1.5 crore each, while Allahabad Bank and Bank of Maharashtra were penalised Rs 2 crore each. Oriental Bank of Commerce was penalised with Rs 1 crore, the RBI said.

“A scrutiny was carried out by RBI in the accounts of the companies of a group and it was observed that the banks had failed to comply with provisions of one or more of the directions issued by RBI,” said the statement released on August 2.

“Based on the findings of the scrutiny, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions,” it added.

In a separate statement, the regulator said a fine of Rs 1 crore was levied on Corporation Bank for non-compliance of norms on cyber security framework as well as fraud classification and reporting.

“A report of cyber security incident submitted by the bank about fraudulent transactions using a cancelled debit card revealed that the bank had failed to comply with the directions issued by RBI on Cyber Security Framework in Banks and Frauds Classification and Reporting by commercial banks and select FIs,” the statement said.#casansaar (Source - PTI, MoneyControl)