As per report the Reserve Bank of india has come down strictly on two banks for non-compliance of its directives and imposed monetary penalties on them. Meanwhile the banks are lakshmi Vilas Bank and Syndicate Bank and the fines imposed on them are Rs 1 crore and Rs 75 lakh respectively.
When explaining why this penalty is being imposed, RBI says lakshmi Vilas Bank failed to comply with certain provisions of the directions issued by it on ‘Income Recognition and Asset Classification (IRAC) norms. Furthermore the detection of the violation came about through the inspection of the statutory books maintained by the bank and the violations pertain to the financial year ended March 31, 2017. Hence as per the practice followed in such cases, Lakshmi Vilas Bank was asked to submit its explanation for the non-compliance of the RBI directives and the response received from the bank was not satisfactory.
Moreover the reason the other entity, Syndicate Bank, received the order from RBI imposing a Rs 75 lakh penalty was its failure in adhering to the RBI regulations in the areas of (i) frauds classification and reporting and (ii) innovative housing loan products upfront disbursal of housing loans. Perhaps RBI says the bank was issued a notice and was given the opportunity of a personal hearing to explain the situation and file a written response to the issues raised.
