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Reserve Bank of India imposes Rs 3 crore penalty on ICICI Bank over rule violations

The penalty has been imposed for contravention of certain directions issued by the RBI on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks’, the RBI said in a release.

May 03, 2021 / 10:21 PM IST
ICICI Bank Headcount in India: 97,350 | Top India locations: Mumbai Area, New Delhi Area, Hyderabad Area | Most common skill: Sales Management, Retail Banking, Management Information Systems (MIS) | In-demand jobs: Finance, Sales, Support

ICICI Bank Headcount in India: 97,350 | Top India locations: Mumbai Area, New Delhi Area, Hyderabad Area | Most common skill: Sales Management, Retail Banking, Management Information Systems (MIS) | In-demand jobs: Finance, Sales, Support

The Reserve Bank of India (RBI) on May 3 imposed a monetary penalty of Rs 3 crore on ICICI Bank for certain rule violations.

The penalty has been imposed for contravention of certain directions issued by the RBI on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks’, the central bank said in a release.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act)," the RBI said.

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 bank with its customers, the RBI said.

Explaining the action, the RBI said an examination revealed contravention of the aforesaid directions issued by the apex bank.

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In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions issued by the RBI.

After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, the RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty, the central bank said.

In an update to stock exchanges, ICICI Bank said the penalty has been imposed for shifting certain investments from HTM (held to maturity) category to AFS (available for sale) category in May 2017.

The bank had transferred two separate categories of securities on two different dates from HTM to AFS in April and May of 2017, which it believed was permissible as per Master Circular on Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks' dated July 1, 2015, the bank said in the exchange note.

"The RBI has held that the shifting of securities the second time in May 2017 without explicit permission was in contravention of RBI directions," ICICI Bank said.
Moneycontrol News
first published: May 3, 2021 08:46 pm

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