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RBI Big Action! 2.20 crore fine slapped on THIS bank; details here

RBI Action on Bank: The Reserve Bank imposed a penalty of Rs 2.20 crore on state-owned Indian Overseas Bank (IOB) for non-compliance with income determination and other deficiencies in regulatory compliance. Advisory on ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning relating to Advances – Divergence in NPA Accounts’, ‘Reserve Bank of India (Interest […]

Edited By : Divya Richa | Updated: Jun 3, 2023 15:33 IST
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RBI

RBI Action on Bank: The Reserve Bank imposed a penalty of Rs 2.20 crore on state-owned Indian Overseas Bank (IOB) for non-compliance with income determination and other deficiencies in regulatory compliance. Advisory on ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning relating to Advances – Divergence in NPA Accounts’, ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’ and ‘Man in the Middle (MiTM) Attack on ATMs’ This penalty has been imposed for violation of the provisions of the directions issued by RBI under.

RBI said, “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.” Statutory Inspection for Supervisory Evaluation of Bank (ISE 2021) ) was conducted by the RBI with reference to its financial position as on March 31, 2021.

The Chennai-based bank failed to make the minimum mandatory transfer of an amount equal to 25 per cent of the declared profit for the year 2020-21 to its reserves. There was a significant difference between NPAs, as reported by it and as assessed by Inspection, and it offered interest on deposits of non-individual constituents at the rates applicable to senior/very senior citizens in some cases. Did.

Further, the bank failed to implement control measures for ATMs relating to end-to-end encryption of communication between ATM terminal/PC and ATM switch within the prescribed time limit.

Two notices were issued to the bank giving it notice to show cause why penalty should not be imposed on it for failure to comply with the provisions of the Act and the directions issued by RBI.

 

First published on: Jun 03, 2023 03:33 PM IST

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