The Reserve Bank of India (RBI) has slapped a monetary penalty of Rs 2 crore on State Bank of India (SBI) for deficiencies in regulatory compliance.
The penalty is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the central bank said in a release.
"The RBI has, by an order dated March 15, 2021, imposed a monetary penalty of Rs 2 crore on State Bank of India for contravention of provisions of section 10 (1) (b) (ii) of the Banking Regulation Act, 1949 (the Act) and specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission," it said.
The statutory inspection of SBI with reference to its financial position as on March 31, 2017, and March 31, 2018, and the Risk Assessment Reports pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to its employees in the form of commission had revealed contravention of the provisions of the Act and specific directions issued by RBI.
Consequently, a show cause notice was issued to SBI to explain why penalty should not be imposed on it for contravention of the provisions of the Act and directions issued by RBI.
"After considering the bank's replies to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforesaid charges were substantiated and warranted imposition of monetary penalty," the release said.