RBI Imposes Monetary Penalty of 1.728 Crore on State Bank of India:

RBI Imposes Monetary Penalty of 1.728 Crore on State Bank of India On April 29, 2025, the Reserve Bank of India (RBI) imposed the monetary penalty of Rs. 1,72,80,000 (Rupees One Crore Seventy Two Lakh Eighty Thousand only) on State Bank of India (SBI) for not obeying few guidelines issued by the central bank regarding ‘Loans and Advances- Statutory and Other Restrictions’, ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ and ‘Opening of Current Accounts by Banks - Need for Discipline’. This penalty has been imposed by the Central Bank of India due to its rights under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. In accordance with its financial position, the RBI conducted the Statutory Inspection for Supervisory Evaluation (ISE 2023) of SBI on March 31, 2023. After finding that the bank did not follow RBI rules and reviewing related communications, the RBI sent a notice asking the bank to explain why it should not be fined for this non-compliance. After reviewing the bank's response to the notice, along with its additional written and oral explanations, the RBI found that several violations had indeed occurred. As a result, it decided to impose a monetary penalty on the bank. These violations included:

• Giving a bridge loan to a company based on money it was expecting from the government as a subsidy or reimbursement.
• Failing to (i) return money (through shadow reversal) to customer accounts within 10 working days after customers reported unauthorised electronic transactions, and (ii) compensate some customers within 90 days of receiving their complaints;
• Opening and maintaining certain current accounts that did not follow the RBI rules.

This action is due to the bank’s failure to meet regulatory standards. It does not question the legality of any transaction or agreement between the bank and its customers. Also, the penalty does not stop the RBI from taking further action if needed.