New Delhi (Anish Yande): ICICI Bank shares are up by 3% on Tuesday's trading session. The shares of the private bank rose as the Reserve Bank of India imposed a penalty of Rs 3 crores on ICICI Bank.
Shares of ICICI Bank opened at Rs 596.65 on Tuesday. ICICI Bank shares rose to an intraday high of Rs 608 per share on Monday from the previous close of Rs 596.75.
Reserve Bank of India issues Rs 3 crore penalty on ICICI Bank:
The Reserve Bank of India had stated on Monday that it had imposed a penalty of Rs 3 crores on ICICI Bank. The central bank has stated the penalty has been imposed for contravention of certain directions issued by the RBI.
The violated directions include ‘Prudential Norms for Classification, Valuation, and Operation of Investment Portfolio by Banks’. RBI imposed the penalty through the powers vested in the central bank under the provisions of section 47 A (1) (c) and section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act), according to the statement.
Reserve Bank of India has based its issued penalty on the deficiencies in regulatory compliance. According to the statement, the penalty is not intended to affect the validity of any transaction or any agreements between the bank and its customers.
Why was penalty imposed on ICICI Bank?
The central bank had conducted a statutory inspection of the bank from 31 March 2017 and 31 March 2018. The examination of the correspondence of the bank regarding payment of remuneration to its employees led to the RBI finding out about the contravention of the provisions of the Banking Regulation Act, 1949 Act.
ICICI Bank had conducted transactions of two categories of securities on different dates from HTM to AFS in April and May of 2017. The bank had believed the transactions to be permissible as per the Master Circular on Prudential Norms for Classification, Valuation, and Operation of Investment Portfolio by Banks that was dated July 1, 2015.
Image Credit: Google