On March 16, 2021, RBI took action to charge a penalty on the State Bank of India of Rs 2 Crore.
The central bank took the initiate due to infringement of certain standards and regulations by the bank. The bank had involvement in neglecting specific sections of the Banking Regulation Act.
Quizzing by RBI regarding payment of remuneration to the employees in the form of a commission led to imposing the penalty. The application of this action revolves around the non-compliance of regulation.
The central bank undertook a regulatory inspection of the financial position as on March 31, 2017, and March 31, 2018. Including the risk-assessment report and evaluation of the remuneration to the employees. By way of commission let out the violation of the directions and the law.
The enactment of the penalty does not involve the say on the quality of any transactions between the bank and its customers.
The notice sent to the bank and the response from the bank gave rise to the confirmation towards supporting the charges. The state-run bank had involvement in the Violation of section10 (1) (b) (ii) of the Banking Regulation Act, 1949.
Implementation of imposing is on the basis of section 47A (1) (c) read with sections 46 (4) (i) and 51 (1) of the Act.
State Bank of India paid the fine of Rs 7 Crore according to the directions of the RBI in 2019. The fine was regarding fraud risk management, infringement of NPA norms, and more.
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