RBI imposes fine of Rs 1.8 crore on Punjab National Bank

New Delhi: The Reserve Bank of India (RBI) on Wednesday imposed a monetary penalty of Rs 1.8 crore on Punjab National Bank (PNB) for ‘deficiencies in regulatory compliance’.

“The Reserve Bank of India (RBI), by an order dated December 15, 2021, has imposed a monetary penalty of Rs 1.80 crore on Punjab National Bank (the bank) for contravention of sub-section (2) of section 19 of the Banking Regulation Act, 1949 (Act), RBI said in a statement.

“This action is based on deficiencies in regulatory compliance and is not intended to impinge on the validity of any transaction or agreement entered into by the Bank with its customers.”

The Statutory Oversight for Supervisory Assessment (ISE) of Punjab National Bank was conducted by RBI on March 31, 2019 in the context of the examination of its Financial Position and Risk Assessment Report, Annual Review of Implementation of Exposure Management Measures for the Financial Year. 2019-20 made by RBI during July 2020 and all related correspondence relating to the same, inter alia, in contravention of sub-section (2) of section 19 of the Act, to the extent the bank had shares in the borrower companies, by way of pledge, amounting to more than thirty percent of the paid-up share capital of those companies.

Further to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the aforesaid provisions of the Act, as stated therein. Read also: Big blow to SBI customers! Bank announces revision of loan interest rates

After considering the bank’s response to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the allegation of contravention of the above provisions of the Act was substantiated and monetary penalty was imposed. It is necessary to go on the bank, to the extent of contravention of the aforesaid provisions of the Act, the central bank said. Read also: Amazon’s AWS suffers another outage; Netflix, Slack, Other Third-Party Services Affected

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