SBI was penalised because it had not met certain conditions set by the reserve bank on income recognition and asset classification norms, covering opening and operating current accounts, reporting of data on large credits and risk management reporting of frauds.
In a statement, the RBI said the order was imposed on Monday 15 July: “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”
Union Bank of India also fined
The RBI’s fine on the Union Bank of India, imposed on 9 July, was for security lapses in cyber security during 2016 involving reports of seven fraudulent messages totalling $171m through the bank’s SWIFT messaging system.
“An examination of the cyber security framework of the bank was carried out which revealed several deficiencies.
“Based on the findings, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the extant directions.
“After considering the replies received from the bank, and submissions made during the personal hearing, RBI decided to impose the aforesaid monetary penalty, based on the extent of non-compliance and the corrective action taken by the bank.”