RBI slaps Rs 1.8 crore penalty on PNB, Rs 30 lakh on ICICI Bank

The Reserve Bank of India (RBI) on Wednesday imposed monetary penalty on Punjab National Bank (PNB) and ICICI Bank. While the central bank slapped a fine of Rs 1.80 crore on PNB, it imposed a fine of Rs 30 lakh on ICICI Bank.
 
The penalty on PNB has been imposed for violation of certain sections of the Banking Regulation Act, 1949, RBI said in a release.
 
The central bank found that PNB held shares in borrower companies, as pledgee, of an amount exceeding 30 per cent of the paid-up share capital of those companies, which was in contravention of sub-section (2) of section 19 of the Banking Regulation Act. Accordingly, the RBI issued a notice to the bank advising it to show cause as to why penalty should not be imposed on it.
 
"After considering the bank's reply to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank...," the release said.
 
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For ICICI Bank, the penalty has been imposed for non-compliance with certain directions issued by the central bank on levy of penal charges on non-maintenance of minimum balance in savings bank accounts.
 
The bank, in non-compliance with RBI's directions, levied charges for non-maintenance of minimum balance in saving accounts which were not directly proportionate to the extent of the shortfall observed, RBI said.
 
It had issued a notice to ICICI Bank, and after considering the reply, the central bank concluded that the charge was substantiated and warranted imposition of monetary penalty.
 
RBI clarified that its action on both the banks 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 its customers.

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