RBI imposes Rs.57.50 Lakh Monetary Penalty on Indian Overseas Bank

Reserve Bank of India on Friday imposed a penalty of Rs.57.5 lakh on state-owned Indian Overseas Bank (IOB) for failing to comply with rules relating to the classification and reporting of fraud. The Reserve Bank of India (RBI) levied the fine based on the bank’s mandatory inspection with respect to its financial situation as of the end of March 2020 and an analysis of reports.

The Press Release is Given Below:

The Reserve Bank of India (RBI) has, by an order dated June 24, 2022, imposed a monetary penalty of ₹57.50 lakh (Rupees Fifty-seven lakh and fifty thousand only) on Indian Overseas Bank (the bank) for non-compliance with certain directions issued by RBI on ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016’, ‘Creation of a Central Repository of Large Common Exposures – Across Banks’ read with ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’ and ‘Prudential Framework for Resolution of Stressed Assets’, and ‘External Benchmark Based Lending’. 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 (the Act).

This action is based on the regulatory compliance shortcomings and is not meant to rule on the legality of any deal or arrangement the bank has with its clients.

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