Share
Mumbai: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹90 lakh on IDBI Bank Limited for non-compliance with RBI directions on “Frauds – Classification and Reporting by Commercial Banks and Select FIs”, “Strengthening the Controls of Payment Ecosystem between Sponsor Banks and SCBs/UCBs as a Corporate Customer”, and the “Cyber Security Framework in Banks”. The penalty has been issued under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
RBI stated that the action is based on deficiencies in regulatory compliance and does not pronounce upon the validity of any transaction or agreement between the bank and its customers.
Statutory Inspections for Supervisory Evaluation of the bank were conducted with reference to its financial positions as on March 31, 2017, March 31, 2018, and March 31, 2019. Examination of inspection reports, Risk Assessment Reports, related correspondence, and the reported incident of multiple fraudulent transactions on June 8 and 9, 2019, in the accounts of two corporate net banking customers (co-operative banks), revealed non-compliance with the aforesaid directions.
RBI noted delays in reporting frauds, delays in submitting Flash Reports for frauds involving ₹5 crore and above, and failure to implement time restrictions on holidays and data access controls for corporate net banking, which resulted in unauthorised debit transactions.
A show-cause notice was issued to the bank. After considering the bank’s reply, oral submissions during the personal hearing, and additional submissions, RBI concluded that the charges of non-compliance were substantiated and warranted the imposition of the monetary penalty.
[RBI]