Accused of violating RBI norms mostly, UCBs have reasons to smile. The Reserve Bank of India (RBI) has imposed a monetary penalty of ? 70 million on State Bank of India for non-compliance with the directions issued by RBI.
Readers would recall that cooperators connected with co-op banking have always argued that UCBs are better manages than PSU Banks. They also cite the case of NPA and say it is much less compared to PSU banks.
The regulator has found SBI violating on Income Recognition and Asset Classification (IRAC) norms, code of conduct for opening and operating current accounts and reporting of data on Central Repository of Information on Large Credits (CRILC), and fraud risk management and classification and reporting of frauds.
This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949 (the Act), reads a release from RBI.
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, RBI clarifies.