RBI slaps fines on 11 banks for delay in reporting fraud

The Reserve Bank of India (RBI) has penalised 11 commercial banks including the State Bank of India, Punjab National Bank (PNB) and Bank of Baroda for delay in reporting fraud in an account despite receiving regulatory instructions to do so.

PNB and Oriental Bank of Commerce, in an exchange filing on August 3, said the penalty was relating to the account of Kingfisher Airlines.

Other banks that have to pay fines ranging from Rs 50 lakhs to Rs 1.5 crore include Corporation Bank, Federal Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, United Bank of India and UCO Bank.

RBI said these banks were advised to report fraud immediately in an account as the Central Bureau of Investigation (CBI) had initiated criminal proceedings. Despite this, banks delayed or did not report fraud to RBI resulting in non-compliance of norms. The penalties were levied on July 31, the RBI said.