The Reserve Bank of India has imposed a collective penalty of Rs 8.5 crore on 11 commercial banks for violating norms on fraud classification and reporting. Fines were imposed on Oriental Bank of Commerce (Rs 1.5 crore), Indian Overseas Bank, Punjab & Sind Bank, UCO Bank and United Bank of India (Rs 1 crore each), Bank of Baroda, Corporation Bank, Federal Bank, Jammu & Kashmir Bank, Punjab National Bank and State Bank of India (Rs 50 lakh each). RBI said in a press release it had levied fines on these banks for non-compliance with certain provisions of ‘frauds classification and reporting by commercial banks and select FIs directions 2016’. It added this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers. It maintained that despite having advised banks to report fraud in an account ‘immediately’ in the backdrop of Central Bureau of Investigation (CBI) having initiated criminal proceedings, the banks had delayed or did not report frauds.
