allahabad bank: RBI slaps Rs 3.5-cr fine on Corp Bank, Allahabad Bank for flouting norms – The Economic Times

The Reserve Bank has imposed a cumulative penalty of Rs 3.5 crore on state-owned lenders Corporation Bank and Allahabad BankNSE -3.64 % for violation of various norms.

“This is to inform that Reserve Bank of India…has imposed an aggregate penalty of Rs 20 million on our bank due to some lapses in monitoring of end use of funds and exchange of information with other banks in respect of one borrower along with some other banks,” Corporation Bank said in a regulatory filing Friday.

The bank has already taken necessary preventive measures to avoid such recurrence, it added.

Allahabad Bank said the RBI has imposed a penalty of Rs 1.5 crore for not monitoring end use of funds, among other violations.

“We have to inform you that the Reserve Bank of India…has imposed a penalty of Rs 1.5 crore on the bank for not monitoring the end use of funds, delay in classification and reporting of fraud and non-adherence with RBI guidelines during restructuring of accounts in respect of one of its borrowers,” the bank said in a regulatory filing.

The amount of penalty is not material considering the size of the bank, it added.

The Kolkata-headquartered lender said it has taken necessary preventive measures to strengthen internal controls to avoid such recurrence.

Earlier this week, the regulator had imposed penalties on Axis Bank, UCO Bank and Syndicate Bank for violation of various norms.

The gross penalties on these three lenders amounted to Rs 5.20 crore.

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Chanda Kochhar case: RBI says law will take its own course

The allegation of conflict of interest was levelled by whistle blower Arvind Gupta.

There were allegations of involvement of Kochhar and her family members in a loan provided to the Videocon group on a quid pro quo basis.
In its first comments on the Chanda Kochhar affair involving allegations impropriety while heading ICICI Bank, the Reserve Bank Thursday said it is for the law enforcement agencies to take an action in the case.

The role of the regulator is limited to looking at the violations of its regulations by individuals or groups, and act on the same, governor Shaktikanta Das said.

“If there are certain things which require investigation, that is in the domain of the investigating agencies and it’s for them to take further action,” he told reporters during the customary post-policy press conference.

He was replying to a specific question on how the banking regulator looks at the developments at the ICICI Bank, where an independent enquiry constituted by the lender has found Kochhar guilty of misconduct.

A few days before her virtual expulsion, the CBI filed an FIR naming Kochhar and others in the alleged quid pro quo in extending a Rs 3,250-crore loan to the Videocon Group.

Amid raging controversy over the case, Kochhar – also a Padma Bhushan awardee and the first woman to head a bank in the country way back in 2009–quit the bank in October 2018 months after the lender had given a clean chit to her.

The independent probe panel headed by retired Supreme Court judge BN Srikrishna has observed that Kochhar violated bank policies and other rules and regulations.

There were allegations of involvement of Kochhar and her family members in a loan provided to the Videocon group on a quid pro quo basis. It was alleged that the Videocon Group pumped money into NuPower Renewables, a firm now owned by Deepak Kochhar, husband of Chanda Kochhar.

The allegation of conflict of interest was levelled by whistle blower Arvind Gupta.

Interestingly, there are media reports saying the RBI had given her a clean chit in 2016 itself, when the allegations first surfaced.

Following the Srikrishna panel report, the bank said it would not treat her leaving the bank as retirement but a termination of her service and also decided to claw back the around Rs 10 crore bonus paid to her between 2009 and March 2018 along with blocking her close to Rs 340 crore of Esops- both a first in the country. She is reportedly planning a legal challenge to both punitive actions.

via allahabad bank: RBI slaps Rs 3.5-cr fine on Corp Bank, Allahabad Bank for flouting norms – The Economic Times

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