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The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 30 lakh on Karur Vysya Bank for non-compliance with certain provisions of the Reserve Bank of India (Frauds- Classification and reporting by commercial banks and select FIs) directions 2016.
"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers" RBI said in a notification.
A Select Scope Inspection (SSI) of the bank was conducted by RBI during the period from 21 February 2022 to 4 March 2022. An examination of the SSI report revealed that the bank failed to report a few accounts as frauds to RBI within a week of the respective Joint Lenders' Forum (JLF) decisions to do so. In furtherance 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 failure to comply with the directions issued by RBI, as stated therein.
After considering the bank's reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with such directions.
Karur Vysya Bank is a Scheduled Commercial Bank, headquartered in Karur in Tamil Nadu, India.
Net profit of Karur Vysya Bank rose 55.97% to Rs 289.29 crore and total income rose 25.8% to Rs 2012.71 crore in Q3 December 2022 over Q3 December 2021.
Shares of Karur Vysya Bank rose 0.15% to Rs 97.65 on Friday, 24 March 2023.
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