Rs 75 Lakh Fine On Syndicate Bank For Fraud Detection Failure; Rs 1 Crore Fine On Lakshmi Vilas Bank

Reserve Bank of India has imposed fine on two prominent banks, for violating norms, and breaking rules.

While Rs 1 crore penalty has been imposed on Lakshmi Vilas Bank, Syndicate Bank has been slapped with a penalty of Rs 75 lakh.

Here are the details..

Lakshmi Vilas Bank Penalized: Rs 1 Crore Fine

As per an order dated October 14th, Lakshmi Vilas Bank has been asked to pay a fine of Rs 1 crore for breaking rules pertaining to ‘Income Recognition and Asset Classification (IRAC) norms,”.

In a statement RBI said, “The Reserve Bank of India (RBI) has, by an order dated October 14, 2019, imposed monetary penalty of Rs 1 crore on Lakshmi Vilas Bank Ltd for non-compliance with certain provisions of directions issued by RBI on ‘Income Recognition and Asset Classification (IRAC) norms,”

Founded in 1926, Lakshmi Vilas Bank is a prominent bank in Tamil Nadu with 569 branches and 3500+ employees. 

They have assets of Rs 54,000 crore as on 2017, and churned out net profits of Rs 265 crore in the same year.

Syndicate Bank Penalized Rs 75 Lakh

Meanwhile Syndicate Bank too has been slapped with a penalty of Rs 75 lakh for violating norms related with fraud detection, frauds classification and reporting of frauds. 

The issue with Syndicate Bank was they failed to report frauds happening in the innovative housing loan products wherein upfront disbursal of loans is done.

Syndicate Bank was founded in 1926, and they have assets worth Rs 3 lakh crore.

More than 35,000 employees work with Syndicate Bank. This year, they were merged with Canara Bank.

Ever since the scandal of PMC Bank came into light, wherein assets worth Rs 3800 crore belonging to HDIL (Housing Development and Infrastructure Ltd) were seized, bank customers are skeptical to bank frauds, and there is a sense of panic everywhere.

Due to the irregularities, and fraud in PMC bank, RBI had banned cash withdrawal of more than Rs 2000, which was later lifted to Rs 10,000, and now, it is Rs 40,000.

We will keep you updated, as more details come.