The Reserve Bank of India (RBI) has taken action against 14 banks across the country for violating the rules. This includes several large banks, including the State Bank. Moreover, the RBI has reportedly fined these banks between INR 50,000 and INR 2 crores.
According to sources, these banks have largely violated the rules with regards to lending money to NBFCs and obtaining financing from NBFCs. Apart from this, the banks have been fined for violating the circulars instructing the central repository of large loans, guidelines for the operation of small banking finance banks and section 19 (2) and section 20 (1) of the Banking Regulation Act, 1949. These include private, government, co-operative, foreign and small finance banks.
These 14 banks happen to be - Bandhan Bank, Bank of Baroda, Central Bank of India, Bank of Maharashtra, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, Jammu & Kashmir Bank, SBI and Utkarsh Small Finance Bank. Bank of Baroda has received the highest penalty, while SBI had the lowest fine to pay. The remaining all other banks had a penance of INR 1 crores each.
On the other hand, the proposed takeover of the Punjab and Maharashtra Cooperative (PMC) Bank by Centrum Financial Services and BharatPe has received the approval of the Reserve Bank of India (RBI) albeit with a handful of riders attached to it.
While offering the in-principle approval, the RBI added that Centrum will need to transfer its stake in the proposed new bank to a non-operative financial holding company or NOFHC in under three and a half years of receiving the approval.
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