MUMBAI: The RBI has imposed a collective fine of Rs 14.5 crore on a consortium of banks that lend to a large non-bank financial group for violation of standards and proper non-disclosure.
The 12 banks fined Rs 1 crore each are Bandhan Bank, Bank of Maharashtra, Central Bank, Credit Suisse, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, Jammu & Kashmir Bank, and Utkarsh Small Financial Bank.
Bank of Baroda was fined Rs 2 crore, while State Bank of India was fined Rs 50 lakh. The RBI did not name the borrower.
The RBI said it was a breach of certain provisions of the instructions issued by the central bank on lending to NBFCs. They also did not follow RBI guidelines in creating a central repository of large common risks.
The RBI previously required banks to submit information on loans above a certain value to a central large credit information repository (CRILC).
Some of these banks have violated section 19 (2) of the RBI Act, which states that no banking company should hold shares in a company, whether as a pledgee, mortgagee or absolute owner, an amount greater than 30% of the paid-up portion. capital of this company.
The central bank also cited a violation of section 20 (1) of the Banking Regulation Act 1949, which prohibits banks from making loans to directors or to companies in which their directors have an interest.
The 12 banks fined Rs 1 crore each are Bandhan Bank, Bank of Maharashtra, Central Bank, Credit Suisse, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, Jammu & Kashmir Bank, and Utkarsh Small Financial Bank.
Bank of Baroda was fined Rs 2 crore, while State Bank of India was fined Rs 50 lakh. The RBI did not name the borrower.
The RBI said it was a breach of certain provisions of the instructions issued by the central bank on lending to NBFCs. They also did not follow RBI guidelines in creating a central repository of large common risks.
The RBI previously required banks to submit information on loans above a certain value to a central large credit information repository (CRILC).
Some of these banks have violated section 19 (2) of the RBI Act, which states that no banking company should hold shares in a company, whether as a pledgee, mortgagee or absolute owner, an amount greater than 30% of the paid-up portion. capital of this company.
The central bank also cited a violation of section 20 (1) of the Banking Regulation Act 1949, which prohibits banks from making loans to directors or to companies in which their directors have an interest.
