The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 59.20 lakh on the South Indian Bank Limited for non-compliance with certain directions on ‘Interest Rate on Deposits’ and ‘Customer Service in Banks’.
This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) of BR Act.
RBI in its statement said the South Indian Bank levied penal charges for non-maintenance of minimum balance / average minimum balance without notifying certain customers by SMS / email / letter, etc.
Further, it said the bank marked lien against certain NRE savings deposit accounts.
The Statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023.
Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said RBI directions.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty.
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