RBI imposed a penalty of Rs 58.9 crore on ICICI Bank for non-compliance on direct sale of securities
As per report the Reserve Bank of India (RBI) said it has imposed a penalty of Rs 58.9 crore on ICICI Bank for non-compliance of its directions on direct sale of securities. Meanwhile the bank clarified its position saying its held-to maturity (HTM) sales happened "due to a genuine misunderstanding on the timing of the applicability of RBI's direction in this matter."
According to sources RBI statement said the penalty had 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 the RBI."
The ICICI Bank said in a statement that "RBI
has imposed a penalty on the Bank for continued sale of government securities
classified as HTM. ICICI Bank had continued with the sales from HTM category
for a few weeks during the quarter ended March 31, 2017, due to a genuine
misunderstanding on the timing of the applicability of RBI's direction in this
matter". Further RBI guidelines require banks to classify investments into
three categories Held for Trading (HFT), Available For Sale (AFS) and Held to
Maturity (HTM).
