MUMBAI: The RBI has imposed a collective penalty of Rs 14.5 crore on a consortium of banks that lend to a large non-bank finance group for violating norms and not making proper disclosures.
The 12 banks fined Rs 1 crore each are Bandhan Bank, Bank of Maharashtra, Central Bank, Credit Suisse, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, Jammu & Kashmir Bank, and Utkarsh Small Finance Bank.
Bank of Baroda has been fined Rs 2 crore, while State Bank of India was fined Rs 50 lakh. The RBI did not name the borrower.
The RBI said that it was for non-compliance with certain provisions of directions issued by the central bank on lending to NBFCs. They have also failed to follow RBI’s directives in creating a central repository of large common exposures.
The RBI had earlier asked banks to submit information on loans above a certain value to a Central Repository of Information on Large Credits (CRILC).
Some of these banks had violated Section 19 (2) of the RBI Act, which states that no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding 30% of the paid-up share capital of that company.
The central bank also cited violation of Section 20 (1) of the Banking Regulation Act, 1949, which prohibits banks from granting loans to directors or companies in which their directors have an interest.
