The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3 crore on ICICI Bank for non-compliance with its directions in the matter of shifting of securities from one category to another.
The central bank, in a statement, said the monetary penalty has been imposed on the Bank for contravention of certain directions contained in its Master Circular on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks.’
"This penalty has been imposed in exercise of powers vested in RBI under the provisions of…the Banking Regulation Act, 1949 (the Act),” RBI said in a statement.
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 statement added.
RBI observed that an examination of correspondence in the matter of shifting of securities from one category to another revealed, inter alia, contravention of the aforesaid directions issued by it.
“In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions issued by RBI,” the statement said.
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 aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty, the central bank said.