RBI imposes Rs 11 cr fine on seven PSBs

The Reserve Bank on Friday said it has imposed a collective penalty of Rs 11 crore on seven public sector banks for violating norms on current account opening.

Allahabad Bank and Bank of Maharashtra have been imposed a fine of Rs 2 crore each, Bank of Baroda, Bank of India, Indian Overseas Bank and United Bank of India have been slapped with fines of Rs 1.5 crore each, while Oriental Bank of Commerce has been imposed with a penalty of Rs 1 crore.

"The Reserve Bank of India (RBI) has, by an order dated July 31, 2019, imposed monetary penalty on seven banks for non-compliance with certain provisions of directions issued by RBI on 'Code of Conduct for Opening and Operating Current Accounts'," RBI said in a release.

It said the penalties have been imposed in exercise of powers vested in the central bank under the provisions of the Banking Regulation Act, 1949.

"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers," the regulator added.

RBI said it carried out a scrutiny of the accounts of companies of a group and it was observed that the banks had failed to comply with provisions of one or more of the directions issued by it.