The Reserve Bank of India (RBI) has imposed a fine of ₹1.72 crore on State Bank of India (SBI) for not complying with several regulatory requirements. The violations include issues related to:
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Statutory Restrictions on Loans and Advances
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Customer Protection: Specifically, limiting customers' liability in unauthorized electronic banking transactions.
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Discipline in Opening Current Accounts: Ensuring proper checks and balances when opening current accounts.
Despite these violations, the RBI clarified that this fine does not affect the validity of customer transactions or contracts with SBI. The fine was imposed after a regulatory inspection and a review of the bank's responses to the notices issued by the RBI.
In a similar move, the RBI also imposed a ₹1 crore fine on Jan Small Finance Bank Limited for violating provisions of the Banking Regulation Act, 1949. However, the specific provisions that were violated were not disclosed by the central bank.
Why Did RBI Take These Actions?
The RBI's actions reflect its commitment to ensuring that all banks adhere to the regulatory guidelines that are set to protect customers and maintain the integrity of the banking system. These inspections and subsequent fines serve as a reminder to all financial institutions, both big and small, that compliance with rules is mandatory.
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Purpose of Inspections: RBI regularly inspects and monitors banks to ensure that they are not negligent in their operations, especially when it comes to customer services.
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Customer Protection: The central bank emphasized that such actions are aimed at reinforcing customer protection and improving the overall compliance culture within banks.
RBI’s Message to Banks:
RBI has sent a clear message that no matter the size of the bank, strict adherence to regulatory guidelines is non-negotiable. Whether it's a large public-sector bank like SBI or a smaller financial institution, RBI is focused on improving banking discipline and ensuring accountability to safeguard customer interests.
