RBI imposes penalty on Punjab and Sind Bank: 5 things customers need to know | Personal finance news
New Delhi: The Reserve Bank of India (RBI) on Friday, June 3, said in a statement that it had imposed a sanction on Punjab & Sind Bank. The bank added that the fine was imposed on the public sector lender for failing to comply with certain instructions it had issued on “external reference-based lending”. “This sanction has been imposed in the exercise of the powers granted to RBI under the provisions of Section 47 A (1) (c) read together with Sections 46 (4) (i) and 51 (1) of the Act Banking Regulation Act 1949 (the Act),” the RBI said in its statement.
5 things to know about RBI penalty on Punjab and Sind Bank
1. RBI imposed a fine of Rs 27.50 lakh on Punjab and Sind Bank.
2. Punjab and Sind Bank should note that “RBI’s action is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the bank with its customers”.
3. RBI added that a statutory review of Punjab & Sind Bank revealed non-compliance with instructions, among others, to the extent that the bank linked certain retail floating rate loans and floating rate loans to micro and small businesses, granted by it after October 1, 2019 to MCLR in lieu of an external benchmark.
4. RBI also issued a show cause notice to the bank. Read also: Bank FD: HDFC Bank against PNB against IDFC Bank; Check the latest interest rates
5. “After reviewing the bank’s response to the notice, the oral submissions made at the personal hearing and consideration of the additional submissions made by it, RBI has come to the conclusion that the prosecution of non-compliance…was well-founded and warranted the imposition of a monetary fine penalty…” RBI said. Read also: EPF Interest Rates at 40-Year Low! Should You Withdraw from EPF Check the pros, cons