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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹57.50 lakh on Indian Overseas Bank for non-compliance with directions on fraud reporting, large exposures, resolution of stressed assets, and external benchmark-based lending. The penalty has been imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
A statutory Inspection for Supervisory Evaluation, based on the bank’s financial position as of March 31, 2020, revealed that the bank failed to report certain ATM card cloning and skimming frauds within the prescribed timeline of three weeks, did not report credit information for certain borrowers with aggregate exposure of ₹5 crore and above to the Central Repository of Information on Large Credits (CRILC), and linked some floating rate loans to Micro and Small Enterprises extended after October 1, 2019, to MCLR/Base Rate instead of an external benchmark.
Following these findings, RBI issued a show-cause notice to the bank. After considering the bank’s response and additional submissions, RBI concluded that the non-compliance was substantiated and warranted the imposition of the monetary penalty.
[RBI]