Reserve Bank of India has imposed monetary penalties on 14 banks on account of non-compliance with certain provisions.
These banks, including Bank of Baroda, were penalised for non-compliance with certain provisions of directions issued by the RBI on Lending to Non-Banking Financial Companies, Bank Finance to Non-Banking Financial Companies, Loans and Advances - Statutory and Other Restrictions, amongst other norms.
Overall, the penalties account for Rs 14.50 crore. Out of the total, Bank of Baroda was penalised with the highest amount - Rs 2 crore, and the State Bank of India the lowest amount - Rs 0.50 crore.
"A scrutiny in the accounts of the companies of a group was carried out by the RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by the RBI and or contravened provisions of the Banking Regulation Act, 1949.
"In furtherance to the same, 'Notices' were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions or contraventions of provisions of Banking Regulation Act, 1949," the RBI said.
As per the statement, the replies received from the banks were duly considered "to the extent the charges of non-compliance with RBI directions or contraventions of provisions of Banking Regulation Act, 1949 were sustained", and the RBI concluded that it warranted imposition of monetary penalty on aforementioned fourteen banks.