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RBI fines SBI 20 mln rupees for breach of employee commission norms

Informist, Tuesday, Mar 16, 2021

 

–RBI fines SBI for breach of norms on commission payment to staff 

–Imposes 20-mln-rupee penalty on SBI 
 

MUMBAI – The Reserve Bank of India has imposed a penalty of 20 mln rupees on State Bank of India for violating guidelines on payment of commission to the bank's employees.

 

The country's largest bank has been fined for violating provisions of the Banking Regulation Act, 1949, and specific directions issued by the RBI on payment of remuneration to employees in the form of commission, as per a release on the regulator's website.


RBI said the statutory inspection of SBI with reference to its financial position as on Mar 31, 2017 and Mar 31, 2018, risk assessment reports, and examination of the correspondence with the bank regarding the payment of the commission to its employees, revealed the contravention.

 

Following this, the RBI issued a show cause notice to the public sector lender, asking it to explain why a penalty should not be imposed. However, after considering the bank’s replies, oral submissions made during a personal hearing, and additional submissions, the regulator decided the charges were substantiated and warranted a monetary penalty.

 

"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 said.

 

Today, shares of SBI ended 1.4% lower at 378.55 rupees on the National Stock Exchange.  End

 

Reported by Anshika Kayastha

Edited by Charumathi Sankaran

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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