The Reserve Bank of India has imposed a monetary penalty of ₹1,45,50,000 on the Central Bank of India, citing deficiencies in regulatory compliance.
The penalty follows the findings of the Statutory Inspection for Supervisory Evaluation (ISE 2022) conducted by the RBI with reference to the bank’s financial position as of March 31, 2022.
In a press release issued on Friday, the RBI detailed the non-compliance issues that led to the penalty. The Central Bank of India was found to have violated RBI directions related to ‘Loans and Advances – Statutory and Other Restrictions’ and ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.’
The inspection revealed that the bank sanctioned a working capital demand loan to a corporation against amounts receivable from the government by way of subsidies. Additionally, the bank failed to credit (shadow reversal) the amount involved in several instances of unauthorised electronic transactions to the customer’s account within 10 working days from the date of notification by the customer. It also did not resolve complaints or provide compensation to certain customers within 90 days from the date of receipt of such complaints.
After considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing, and examination of additional submissions, the RBI determined that the charges against the bank were substantiated, warranting the imposition of the monetary penalty.
The penalty has been imposed under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
