The Reserve Bank of India (RBI) has imposed a penalty to Rs 4.50 crore on IndusInd Bank for non-compliance with some prudential norms. The apex bank said that the violation pertains to certain directions including on exposure norms, prudential norms on income recognition, asset classification and provisioning pertaining to advances.
"The Reserve Bank of India (RBI) has imposed, by an order dated October 16, 2020, a monetary penalty of Rs 4.50 crore (Rupees Four crore and fifty lakh only) on IndusInd Bank Limited (the bank) for non-compliance with certain provisions of directions issued by RBI on 'Exposure Norms', 'Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances', 'SPARC - Monitoring of Information Submission by bank', 'Creation of a Central Repository of Large Common Exposures - Across Banks' read with directions on 'Central Repository of Information on Large Credits (CRILC) - Revision in Reporting', and 'Disclosure in Financial Statements- Notes to Accounts," said the RBI in a statement.
"This action 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 bank with its customers," the RBI clarified.
The RBI said that statutory inspection of the bank with reference to its financial position revealed that the bank had not complied with the directions issued by the apex bank. It then sent a notice to IndusInd asking why penalty should not be imposed for its failure to comply with the RBI directions.
"After considering the bank's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI decided to impose monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions," said the apex bank in its statement.