MUMBAI: The Reserve Bank of India (RBI) has imposed monetary penalty of Rs10 lakh (Rs1 million) on the Trissur-headquartered South Indian Bank Ltd (SIB) for non-compliance with directions issued by RBI on ‘Guarantees and Co-acceptances’, according to a RBI release on Wednesday.
The RBI statement said the action was based on deficiencies in regulatory compliance. RBI said it had received references from a government department and a private party alleging non-payment of invoked bank guarantees by the bank.
“Examination in this regard revealed violation of RBI directions on ‘Guarantees and Co-acceptances’ and a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions,” the RBI statement added.
After considering the bank’s reply, oral submissions made during the personal hearing and additional submission made by the bank after the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
