New Delhi: State-owned Indian Overseas Bank said in a regulatory filing that it has been penalised by the Reserve Bank of India (RBI) with a fine of Rs 2.2 crore (Rupees Two Crore and Twenty Lakhs only). The penalty has been imposed due to the bank's failure to comply with certain directives issued by the RBI.
Further, the filing noted that to address this non-compliance issue, Indian Overseas Bank has taken necessary measures to strengthen its internal controls and ensure the prevention of such occurrences in the future.
The penalty is related to non-compliance with directives on 'Prudential Norms on Income Recognition, Asset Classification and Provisioning Pertaining to Advances - Divergence in NPA Accounts', 'Reserve Bank of India (Interest Rate on Deposits) Directions, 2016', and Advisory on 'Man in the Middle (MiTM) Attacks in ATMs'.
The penalty imposed by the RBI is a result of identified deficiencies in Indian Overseas Bank's regulatory compliance. It is important to note that this action does not pass judgement on the validity of any transactions or agreements entered into by the bank with its customers, as clarified by the RBI.
The RBI conducted a statutory Inspection for Supervisory Evaluation of the bank (ISE 2021) with reference to its financial position as of March 31, 2021. Based on the findings of this inspection, the penalty was imposed on Indian Overseas Bank.
The penalty serves as a reminder to all banks and financial institutions to adhere to regulatory guidelines and ensure compliance with the specified directions issued by the RBI. Indian Overseas Bank acknowledges the deficiencies identified and is committed to strengthening its regulatory compliance framework to prevent future non-compliance incidents.