It said that action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction entered into by the banks with it’s customers.
The imposition of penalty was due to contravention of certain sections of Banking Regulation Act.
Reserve Bank of India on Tuesday imposed penalty of RS 2 CR on State Bank of India (SBI) for contravention of norms, including specific directions to the lender on remuneration to it’s employees in the form of commission.
According to the report, the inspection held on the statutory validity of the bank with reference of its financial position as on 31 March, 2017 and March 31, 2018 Risk Assessment reports (RARs) pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to it’s employees in the form of commission, revealed the contravention of the provisions of the Act and directions.
A kind of notice was issued to the bank by RBI, after getting replies form the bank in which all the information regarding payment was disclosed to RBI, going through all the documents RBI came to conclusion that “ the charges were disapproved and monetary penalty was imposed”, report said.