RBI Imposes Penalties On Citibank, Bank Of Baroda, Indian Overseas Bank For Rule Violations
In a regulatory move, the Reserve Bank of India (RBI) has levied monetary penalties on Citibank, Bank of Baroda (BoB), and Indian Overseas Bank (IOB) for violations of banking regulations. The penalties, amounting to crores of rupees, were imposed following an assessment of the banks' adherence to RBI guidelines and directives.
As per reports, Citibank has been slapped with a penalty of Rs 5 crore for contravening Section 26A of the Banking Regulation Act, 1949 (the BR Act), and non-compliance with RBI Directions on 'Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks.' The penalty underscores the importance of strict adherence to regulatory frameworks in the banking sector.
Bank of Baroda has incurred a penalty of Rs 4.34 crore for non-compliance with specific directives issued by the RBI concerning the 'Creation of a Central Repository of Large Common Exposures - Across Banks.' The penalty highlights the regulatory emphasis on maintaining transparency and adherence to prescribed protocols.
Indian Overseas Bank has been fined Rs 1 crore for failing to comply with certain directives issued by the RBI regarding 'Loans and Advances – Statutory and Other Restrictions.' This penalty underscores the significance of meticulous adherence to guidelines governing loans and advances.
The RBI had earlier issued notices to these banks, directing them to provide justifications for their failure to comply with the central bank's directions. The penalties were imposed after a thorough examination of the responses received and in line with the regulatory framework in place.
The penalties imposed on Citibank, Bank of Baroda, and Indian Overseas Bank reiterate the RBI's commitment to maintaining the integrity of the banking system through stringent regulatory oversight. The central bank remains steadfast in ensuring that financial institutions adhere to prescribed guidelines, fostering stability and transparency in the banking sector.
In addition to the penalties, the RBI has advised the banks to take corrective measures promptly to address the identified lapses and comply with the directives. The banks are expected to demonstrate a proactive approach in aligning their operations with regulatory requirements.
This regulatory action signals the RBI's unwavering dedication to upholding the highest standards of governance and compliance within the Indian banking sector, contributing to the overall robustness of the financial system.
