RBI imposes Rs. 3 crore penalty on ICICI Bank for contravention of rules

RBI has recently said that it has imposed a penalty of Rs. 3 crore on ICICI Bank for contravention of certain directions on prudential norms for classification, valuation and operation of investment portfolios by banks. Penalty has been imposed in exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949.

According to the statement or RBI, “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”

RBI also added that the statutory inspection of the bank with reference to its financial position as on 31 March 2017 and 31 March 2018 and the Risk Assessment Reports (RARs) pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to its employees in the form of commission, revealed, inter alia, contravention of the provisions of the Act and aforesaid specific directions issued by RBI.

In furtherance to the same, RBI stated, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the provisions of the Act/ specific directions.