The Reserve Bank of India (RBI) has imposed monetary penalties totaling Rs.2.72 crore on two banks—State Bank of India (SBI) and Jana Small Finance Bank—for violations of regulatory norms.

Penalty on State Bank of India (SBI)

• SBI has been fined Rs.1.72 crore for non-compliance with several directives issued by the RBI. The violations include:
• Utkarsh
• Extending bridge loans to entities against amounts receivable from the government in the form of subsidies or reimbursements.
• Failing to credit amounts involved in unauthorized electronic transactions to customer accounts within 10 working days of notification.
• Not compensating customers within 90 days from the date of receipt of complaints regarding unauthorized transactions.
• Opening and maintaining current accounts in violation of RBI guidelines.

These infractions were identified during the RBI's Statutory Inspection for Supervisory Evaluation (ISE) conducted with reference to SBI's financial position as of March 31, 2023. 

Penalty on Jana Small Finance Bank

Jana Small Finance Bank has been penalized Rs.1 crore for contravening provisions of the Banking Regulation Act, 1949. Specifically, the bank issued and allotted Compulsory Convertible Preference Shares (CCPS) to certain individuals, resulting in their shareholding exceeding the permissible limit of the bank's paid-up share capital without obtaining prior approval from the RBI, as mandated under Section 12B(1) of the Act. 

RBI's Clarification

The RBI has clarified that these penalties are imposed due to deficiencies in regulatory compliance and are not intended to question the validity of any transactions or agreements entered into by the banks with their customers.

These actions underscore the RBI's commitment to enforcing strict compliance with banking regulations to ensure the integrity and stability of India's financial system.