The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs one crore on country's largest lender, State Bank of India (SBI) for violation of certain rules.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers., the RBI said in a release.
The Statutory Inspections for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial positions as on March 31, 2018, and March 31, 2019, the RBI said.
The subsequent examination of the Risk Assessment Reports, Inspection Report, and all related correspondence revealed contravention of rules with respect to the bank held shares in borrower companies of an amount exceeding thirty percent of paid-up share capital of those companies, the RBI said.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it.