RBI slaps penalties on BoB, Citibank, and IOB for breach of regulatory compliance

The Reserve Bank of India (RBI) on November 24 imposed monetary penalties on Citibank, Bank of Baroda, and Indian Overseas Bank for rule violations.

The central bank imposed a penalty of Rs 5 crore on Citibank, Rs 4.34 crore on Bank of Baroda, and Rs 1 crore on Indian Overseas Bank, it said in different press releases.

Citibank received the penalty for contravention of Section 26A of the Banking Regulation Act, 1949 (the BR Act) and non-compliance with RBI Directions on ‘Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks.

BoB received the penalty for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures - Across Banks’.

IOB received the penalty for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions.

The central bank issued notices to the banks, advising them to provide reasons as to why a penalty should not be imposed for their failure to comply with the RBI's directions, as stated in the notice.