RBI slaps Rs 40 lakh penalty on SBI for flouting fake note norms

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RBI slaps Rs 40 lakh penalty on SBI for flouting fake note norms

The Reserve Bank of India has imposed a monetary penalty of Rs 40 lakh on State Bank of India for non-compliance of its directions on detection and impounding of counterfeit notes. An RBI notification issued from Mumbai today informs that the action is based on deficiencies in regulatory compliance found at two of the bank’s currency chests. The regulator had carried out an inspection of currency chests at two branches of the country's largest lender and noticed certain violation, following which a show cause notice was issued in the first week of January. RBI said the penalty seemed warranted and substantiated considering the bank’s reply and oral submissions. RBI has clarified that penal action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Earlier this week, RBI had imposed monetary penalties on Axis Bank for violation of non-performing asset classification norms and Indian Overseas Bank for not complying with the KYC regulations.