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RBI imposes Rs 25 lakh penalty on Punjab and Sind Bank

RBI imposes Rs 25 lakh penalty on Punjab and Sind Bank

Examination of bank's cyber incident reports and report of forensic analysis had revealed non-compliance with certain provisions of cyber security framework for banks.

RBI had issued a show cause notice to the bank asking it why penalty should not be imposed for non-compliance with the directions issued. RBI had issued a show cause notice to the bank asking it why penalty should not be imposed for non-compliance with the directions issued.

The Reserve Bank of India (RBI) has imposed a penalty of Rs 25 lakh on Punjab and Sind Bank for non-compliance with certain provisions of cyber security framework for banks issued by the central bank in 2016.

The Punjab and Sind Bank had reported a few cyber incidents to RBI on May 16 and May 20, 2020. Examination of the incident reports and the report of the forensic analysis of the said incidents, revealed, non-compliance with aforesaid directions, RBI said in a release on Friday.

Accordingly, the central bank had issued a show cause notice to the bank asking it why penalty should not be imposed for non-compliance with the directions issued by RBI.

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"After considering the bank's reply to the show cause notice, oral submissions made during the personal hearing and examination of further clarifications/documents furnished by the bank, RBI came to the conclusion that to the extent the charges of non-compliance with RBI directions were substantiated, it warranted imposition of monetary penalty," the release said.

The Rs 25-lakh penalty was imposed for deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI said.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1) of the Banking Regulation Act, 1949," it added.

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