Source: ET
Context:
The Reserve Bank of India (RBI) imposed a penalty of ₹44.70 lakh on Bandhan Bank following a supervisory inspection related to its financial position as of March 31, 2024. This highlights the regulator’s continued vigilance over banks’ adherence to compliance norms.
Key Highlights:
- Reason for Penalty:
- Payment of commission-based remuneration to certain employees—contrary to RBI regulations.
- Manual interventions in backend account data without properly capturing audit trails/logs with user details.
- Statutory Basis:
- Penalty imposed under powers conferred by Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949.
- Violations included breach of Section 10(1)(b)(ii) of the Act and RBI’s September 14, 2020 circular on automation of income recognition, asset classification and provisioning.
Important Sections For Exams
- 47A(1)(c): RBI’s power to impose penalty on banks for non-compliance.
- 46(4): Defines the maximum penalty amount (₹1 crore + ₹50,000/day for continuing default).
- Section 10(1)(b)(ii): Bars banks from employing persons convicted of serious offences or found unfit to protect depositor/public interest.
- RBI’s role: Ensures banks comply with this, safeguarding governance and depositor confidence.
