ICICI Bank fined Rs 58.9 crore for treasury violations

A day after India's second largest private lender ICICI Bank gave clean chit to its CEO Chanda Kochhar, the Reserve Bank of India (RBI), in a separate case, imposed a monetary penalty of Rs 58.9 crore on ICICI Bank Ltd for failure to adhere to held-to-maturity (HTM) guidelines.

RBI said the penalty was levied for non-compliance on direct sale of securities from its HTM portfolio. "This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions/guidelines issued by RBI," the central bank said.

Banks need to disclose the amount of securities they keep under the HTM segment under which the papers are held until maturity and cannot be used for intra-day trading. The RBI allows banks to sell securities from HTM subject to certain limits and disclosure rules, Reuters reported.

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, the banking regulator said.

with Reuters inputs