BBN Bureau
Non-compliance with certain customer protection norms
MUMBAI/April 22-2022: The Reserve Bank of India (RBI) has imposed a penalty of Rs36 lakh on Central Bank of India (CBI) for non-compliance of certain norms with regard to customer protection.
RBI said in a release the imposition of penalty on the bank was for “non-compliance with certain directions issued by RBI on ‘Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.”
RBI added that this penalty has been imposed in 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.
Background
The statutory Inspection for Supervisory Evaluation (lSE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2020.
The examination of the Risk Assessment Report, Inspection Report and all related correspondences pertaining to the same, revealed, inter alia, non-compliance with certain directions to the extent that the bank has failed to credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of notification by the customer, according to RBI.
RBI further said that 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 said directions, as stated therein.
RBI further said that after considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions, the regulator came to the conclusion that the charge of non-compliance with the said RBI directions were substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions.
