Fake note crackdown: Rs 40 lakh penalty slapped on SBI by RBI; reason will startle you

Fake note crackdown: The Reserve Bank has slapped a penalty of Rs 40 lakh on SBI for not complying with its directions on detection and impounding of counterfeit notes. "The Reserve Bank of India (RBI) has imposed, on March 01, 2018, a monetary penalty of Rs 4 million on State Bank of India for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes," the central bank said in a notification issued today. RBI said it found deficiencies on SBI's part in regulatory compliance with counterfeit notes regulations.

The penal action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI added. The regulator had carried out inspection of currency chests of two branches of the country's largest lender and noticed violation of its instructions issued on the detection and impounding of counterfeit notes.

"Based on the inspection report and other relevant documents, a notice, dated January 5, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI," it said.

After considering the bank?s reply and oral submissions made in personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with its directions/ guidelines were substantiated and warranted imposition of monetary penalty, said the notification.

The stock of SBI today dropped 3.84 per cent to close at Rs 246.65 on the BSE.

Earlier on Monday, RBI said it has imposed a Rs 3 crore penalty on Axis Bank for violation of non-performing asset classification norms, and a Rs 2 crore penalty on Indian Overseas Bank for not complying with the KYC regulations.