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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.No Name of the Bank Amount of penalty Violation
1 Punjab National Bank (PNB) Rs 50 lakh Delay in reporting of fraud in the account of Kingfisher Airlines.
2 Oriental Bank of Commerce(OBC) Rs 1.5 crore Delay in reporting fraud in the account of Kingfisher Airlines.
3 United Bank of India Rs 1 crore Non-compliance relating to reporting of frauds.
4 Punjab & Sind Bank Rs 1 crore Non-compliance relating to reporting of frauds.
5 State Bank of India (SBI) Rs 50 lakh Non-compliance relating to reporting of frauds.
6 Bank of Baroda(BoB) Rs 50 lakh Delay in reporting fraud in an account.
7 Federal Bank Rs 50 lakh Delay in reporting fraud in an account.
8 Corporation Bank Rs 1 crore Non-compliance with the directions on cybersecurity framework and frauds classification and reporting.
9 UCO Bank(United Commercial Bank) Rs 1 crore Delayed 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.No Name of the bank Amount of penalty (Rs. in crore)
1 Allahabad Bank 2.0
2 Bank of Baroda 1.5
3 Bank of India 1.5
4 Bank of Maharashtra 2.0
5 Indian Overseas Bank 1.5
6 Oriental Bank of Commerce 1.0
7 Union Bank of India 1.5