The RBI announced on Friday that it has imposed a fine of Rs. 84.50 lakh rupees on the Central Bank of India (the Bank) for failing to comply with certain provisions of norms related to fraud classification and reporting.
The Reserve Bank had conducted a statutory inspection to provide a regulatory assessment of the bank’s financial condition as of March 31, 2021.
Review of the reports revealed that the public sector lender had failed to report certain accounts to RBI as fraudulent within seven days of the Joint Lenders’ Forum (JLF) decision to declare the accounts fraudulent.
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It had collected SMS notification fees from its customers on a flat-rate basis rather than based on actual usage.
RBI had issued a notice to the bank asking it to provide reasons why it should not be fined for failing to follow instructions.
“Upon reviewing the bank’s response to the notice and the oral submissions made during the in-person interview, RBI concluded that the allegation of failure to comply with the above RBI instructions was well founded and warranted the imposition of a fine…” reads in the head office said the bank.
However, RBI added that the penalty was based on failures in regulatory compliance and was not intended to make a statement about the validity of any transactions or agreements the bank has entered into with its customers.
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