Mumbai, August 2: The Reserve Bank of India on Friday imposed a monetary penalty on Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Indian Overseas Bank, Oriental Bank of Commerce and Union Bank of India for non-compliance with certain provisions of directions issued it. The penalty ranges between Rs 1-2 crore for violating norms on fraud classification, bill discounting and monitoring of end-use of funds.

According to the information, the apex monetary body fined Rs 1.5 crore each on Bank of Baroda, Bank of India, Indian Overseas Bank and Union Bank of India. While a penalty of Rs 2 crore each was imposed on Allahabad Bank and Bank of Maharashtra. Even Oriental Bank of Commerce was fined with Rs 1 crore, said RBI. India Unlikely to Sign China-Backed Asia-Pacific Trade Pact, Says RSS Economic Wing

Issuing a statement, RBI said, as quoted by news agency ANI, "A scrutiny was carried out by RBI in the accounts of the companies of a group and it was observed that the banks had failed to comply with provisions of one or more of the directions issued by RBI."

It said, "Banks shall not charge foreclosure charges/pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co-obligant."

Adding on, "Based on the findings of the scrutiny, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions." Even Corporation bank was levied up with Rs 1 crore fine or non-compliance of norms on cybersecurity framework.

On the issue of cybersecurity, the RBI statement further states, "A report of cybersecurity incident submitted by the bank about fraudulent transactions using a cancelled debit card revealed that the bank had failed to comply with the directions issued by RBI on Cyber Security Framework in Banks and Frauds Classification and Reporting by commercial banks and select FIs."

(The above story first appeared on LatestLY on Aug 02, 2019 08:49 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).