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RBI imposes fine on 9 commercial Banks for non-compliance relating to reporting of frauds

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On August 3,2019, India’s central banking institution RBI(Reserve Bank of India) in exercise of the powers conferred under various sections of the Banking Regulations Act,1949 has imposed a penalty on nine commercial banks for violations of norms including delay on the reporting of fraud in the account of Kingfisher Airlines by two banks (PNB,OBC).RBIKey points:
i. Here is the detailed table report of banks & the amounts of fine imposed by RBI.

S.NoName of the BankAmount of penaltyViolation
1Punjab National Bank (PNB)Rs 50 lakhDelay in reporting of fraud in the account of Kingfisher Airlines.
2Oriental Bank of Commerce(OBC)Rs 1.5 croreDelay in reporting fraud in the account of Kingfisher Airlines.
3United Bank of IndiaRs 1 croreNon-compliance relating to reporting of frauds.
4Punjab & Sind BankRs 1 croreNon-compliance relating to reporting of frauds.
5State Bank of India (SBI)Rs 50 lakhNon-compliance relating to reporting of frauds.
6Bank of Baroda(BoB)Rs 50 lakhDelay in reporting fraud in an account.
7Federal BankRs 50 lakhDelay in reporting fraud in an account.
8Corporation BankRs 1 croreNon-compliance with the directions on cybersecurity framework and frauds classification and reporting.
9UCO Bank(United Commercial Bank)Rs 1 croreDelayed reporting of fraud.


RBI imposes a collective penalty of Rs 11 crore on 7 public sector banks
On August 2, 2019, The Central also named seven banks for a collective fine of total Rs 11 crore for violation of its direction on fraud classification, reporting & opening of current accounts and reporting funds on balance sheet. The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.

The list of 7 banks which faced penalties and the amounts include,

S.NoName of the bankAmount of penalty (Rs. in crore)
1Allahabad Bank2.0
2Bank of Baroda1.5
3Bank of India1.5
4Bank of Maharashtra2.0
5Indian Overseas Bank1.5
6Oriental Bank of Commerce1.0
7Union Bank of India1.5