Reserve Bank of India imposes monetary penalty of INR40,00,000/- on State Bank of India

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Reserve  Bank of  India vide Press Release on March 07, 2018 informed to public at large, that it has imposed, on March 01, 2018, a monetary penalty of ₹ 4 million on State Bank of India. The monetary penalty was imposed for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes.

Reserve Bank of India has clarified that 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.

Brief Background: -

The currency chest inspection of two branches of the bank by Reserve Bank of India officials, revealed inter alia, violation of the instructions issued by RBI on Detection and Impounding of Counterfeit Notes.

Based on the inspection report and other relevant documents, a Notice, dated January 05, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI.

After considering State Bank of India’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty.

Reserve Bank of India’s Master Circular on Detection and Impounding of Counterfeit Notes can be read here.

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