RBI Imposes Rs 3 Crore Penalty On ICICI Bank For This Reason

RBI ruled that the shift in categories of its securities was made in May 2017 without explicit permission from the apex bank, hence incurring the fine.

RBI has imposed a Rs 3 crore penalty on ICICI Bank for violating certain norms. 

RBI Explains Judgement

In its official statement the RBI said that it had issued certain directions under its Master Circular on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks’ which the private lender had contravented.

The RBI is making use of its powers it holds under the provisions of the Banking Regulation Act, 1949.

The apex bank further explained that the fine was not intended to make judgment on the transactions and agreements the bank conducts with its customers nor its validity. 

ICICI’s Offence

The action is made only in cognisance of ICICI’s lapse in regulatory compliance when it made the decision to shift certain investments from the HTM (held to maturity) category to AFS (available for sale) category in May 2017.

The penalty was imposed after examination of correspondence with regards to shifting the categories of securities which revealed non compliance of directions among other things.

RBI ruled that the shift made for the second time after April in May 2017 was done without explicit permission from the apex bank. 

Appeal Rejected

ICICI Bank was offered a chance to explain itself and to appeal to the RBI why it should not be imposed a monetary fine, to be submitted as an oral response. 

However after the personal hearing concluded along with examination of additional submissions, the RBI stood firm by its ruling and stated that the fine was warranted and substantiated. 

RBI Imposes Rs 25 Cr Fine On YES Bank For Fraud In Selling Bonds To Investors

Comments are closed, but trackbacks and pingbacks are open.

who's online