The Reserve Bank of India (RBI) has taken big action against the Central Bank of India. RBI has imposed a more than Rs 1.45 lakh fine against the bank for violating the rules. The Reserve Bank has taken this action against the public sector Central Bank of India by issuing an order on June 11.
Loan, Advance and Customer Protection Rules Violated
According to the RBI, the Central Bank of India has been found guilty of violating some central bank guidelines related to loans, advances, and customer protection. RBI has taken this action under the Banking Regulation Act of 1949. The Central Bank has been ordered to pay a fine of Rs 1,45,50,000.
RBI Not Satisfied With The Bank’s Reply
RBI had examined the financial position of the Central Bank as of March 31, 2022. It was found that the RBI guidelines are not being appropriately followed. After this, the central bank issued a show cause notice to the Central Bank of India. After the bank had replied to the notice and the arguments given during the hearing, RBI decided that the allegations against the bank were correct. Therefore, a fine should be imposed on it.
RBI Said – There Will Be No Adverse Effect On Customers
Central Bank of India had sanctioned a working capital loan to a corporation in exchange for the amount received from the government through subsidy. Apart from this, it failed to credit the amount of unauthorized electronic transactions in the customer’s account within 10 working days. Also, it could not compensate some customers within 90 days of the complaint. RBI has clarified that this action has been taken against the bank. This decision will not have any adverse effect on the customers.
