Mumbai: Reserve Bank of India on Tuesday imposed a penalty of Rs 2 crore on State Bank of India (SBI) for contravention of norms, including specific directions to the lender on remuneration to its employees in the form of commission.
The penalty has been imposed for contravention of certain sections of Banking Regulation Act and its specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission, according to a release.
It said the 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.
According to the release, the statutory inspection of the bank with reference to its financial position as on March 31, 2017 and March 31, 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 contravention of the provisions of the Act and the directions.
A show cause notice to the bank was issued, and after considering its replies, RBI came to the conclusion that “the charges were substantiated and warranted imposition of monetary penalty”, the release said.