ICICI Bank penalised Rs59 cr for violating securities sale rule

MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs58.9 crore on ICICI Bank for non-compliance with directions issued by RBI on direct sale of securities from its held-to-maturity (HTM) portfolio and specified disclosure in this regard.

Held to Maturity investments are investments made by the bank, which it intends to hold till maturity. Only debt securities can be classified as HTM because they have a definite maturity. An HTM investment is reported on balance sheet at its amortized cost.

The RBI order to this extent was issued on March 26, according to an official release today. 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.

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.

Banks are permitted to hold investments under the HTM category in excess of the limit of 25 per cent of their total investments, provided the excess comprises only SLR securities and the total SLR securities held under the HTM category cannot exceed a certain proportion of NDTL set by the central bank.



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