Srinagar: The Reserve Bank of India (RBI) imposed a monetary penalty on three private and public sector lenders on Friday. The central bank charged Jammu & Kashmir Bank with ₹2.5 crore penalty, while the BSE-S0003537″ data-name=”Bank of Maharashtra”>Bank of Maharashtra faced a fine of ₹1.45 crore. Axis Bank received the least amount of penalty among them to the tune of ₹30 lakh.
The penalties were imposed on June 22nd in these three banks.
RBI imposed a ₹2.5 crore penalty on J&K Bank for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures-Across Banks’, read with ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, ‘Loans and Advances – Statutory and other Restrictions’ and ‘Time-bound implementation and strengthening of SWIFT-related operational controls’.
According to RBI’s inspection, J&K Bank non-complied in — (i) failed to ensure integrity and quality of data submitted to CRILC, (ii) extended term loans to a corporation (a) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects are sufficient to take care of the debt servicing obligations and (b) failing to ensure that the repayment/servicing of said term loans were not made out of budgetary resources and (iii) created financial/non-financial messages in SWIFT without first ensuring that the underlying transactions have been duly reflected in the CBS.
On Friday, J&K Bank’s share price closed at ₹56.50 apiece, down by 2.99% on BSE.
