The Reserve Bank of India has imposed a fine of two crore rupees on Standard Chartered Bank for its delay in disclosing information about bank fraud. This economic penalty was imposed on Standard Chartered Bank for not following the instructions of the central bank.
Under the Reserve Bank of India Directions 2016 (Reserve Bank of India Directions 2016), there is a directive to classify and notify frauds by commercial banks and select financial institutions, which was ignored by Standard Chartered Bank.
The central bank said in a statement, “RBI has been fined for delay in disclosing the fraud, which was detected during the statutory inspection of the bank on 31 March 2018 and 31 March 2019.”
The central bank said that earlier a notice was issued to the bank, in which it was issued a show cause notice that why the bank should not be fined for not complying with the instructions.
After considering the notice given at the personal hearing and the bank’s reply to the oral submission, the RBI concluded that the bank should be fined for not following the central instructions.
Big question: Will the bank’s customers have any effect?
In the coming days, the banks keep ignoring the guidelines and cases of disturbances keep coming up. Reports of actions on banks have been attracting the attention of consumers. In such a situation, consumers often have the same fear about how safe their money is. There is no threat to their money deposited in banks due to RBI’s action!
However, the RBI has clarified that there will be no such effect. The RBI has further stated that the action taken against Standard Chartered Bank is based on deficiencies in regulatory compliance. Its purpose is not to pass judgment on the validity of any transaction or agreement between banks and customers. In such a situation, it is clear that this action is not going to affect the money of the customers of these two banks.
Recently two co-operative banks were fined
On January 4, the RBI took action on two cooperative banks. The central bank imposed a fine of Rs 7 lakh on two co-operative banks for violation of KYC and certain other norms. One of these is the commercial cooperative bank of Raipur, and the other is the Maharashtra Nagari Cooperative Bank of Latur.
Commercial Cooperative Bank Maryadit was fined Rs 5 lakh and Maharashtra Nagari Cooperative Bank Maryadit was fined Rs 2 lakh. Commercial Cooperative Bank Maryadit, Raipur was fined for not following the instructions issued by RBI regarding o pning of on-site ATMs and KYC.
The disturbance was revealed in the investigation report
These upsets were detected in the bank’s investigation report. According to the RBI, on March 31, 2018, the bank’s inspection report with reference to its financial position revealed non-compliance of instructions to open ATM and KYC, among other things.
At the same time, Maharashtra Nagari Cooperative Bank Maryadit, Latur was fined for not following the instructions issued by the central bank regarding KYC. Please tell that it is mandatory for all banks in the country to follow the government guidelines of KYC.