New Delhi: The Reserve Bank of India (RBI) on Friday said that it has imposed a monetary penalty of Rs 36 lakh on the Central Bank of India for non-compliance with certain directions of the central bank. The order was issued on April 18th, 2022. The lender has been penalized for failing to comply with directions issued by RBI on ‘Customer Protection-Limiting Liability of Customers in Unauthorized Electronic Banking Transactions’, it said in a statement.
RBI noted that the penalty has been imposed in the exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) and section 51(1) of the Banking Regulation Act, 1949. It added that this action is based on the 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 explained that the statutory Inspection for Supervisory Evaluation (lSE) of CBI was conducted by the central bank with reference to its financial position as of March 31st, 2020. “examination of the Risk Assessment Report, Inspection Report and all related correspondences pertaining to the same, revealed, inter alia, non-compliance with the aforesaid directions to the extent the bank (CBI) failed to credit (shadow reversal) the amount involved in the unauthorized electronic transaction to the customer’s account within 10 working days from the date of notification by the customer,” noted RBI.
In this regard, RBI had issued a notice to CBI advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said directions. After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.