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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹36 lakh on Central Bank of India for non-compliance with directions on Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions. The penalty has been imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 51(1) of the Banking Regulation Act, 1949.
RBI conducted a statutory Inspection for Supervisory Evaluation of the bank with reference to its financial position as of March 31, 2020. The examination of the Risk Assessment Report, Inspection Report, and related correspondence revealed that the bank failed to credit (shadow reversal) the amount involved in unauthorised electronic transactions to the customer’s account within 10 working days from the date of notification.
A show-cause notice was issued to the bank to explain why a penalty should not be imposed. After considering the bank’s written response, oral submissions during the personal hearing, and additional submissions, RBI concluded that the non-compliance was substantiated and warranted the imposition of the monetary penalty.
[RBI]