Three Indian banks, both private and public, were fined today by the Reserve Bank of India (RBI). The Reserve Bank of India levied a punishment of Rs 1.45 crore on the Bank of Maharashtra and Rs 2.5 crore against the Jammu & Kashmir Bank. The penalty of Rs 30 lakh was the lowest, and it was given to Axis Bank.
For failing to comply with certain directions issued by RBI, including those concerning the “Creation of a Central Repository of Large Common Exposures-Across Banks,” “Central Repository of Information on Large Credits (CRILC) – Revision in Reporting,” “Loans and Advances – Statutory and other Restrictions,” and “Time-bound implementation and strengthening of SWIFT-related operational controls,” RBI fined J&K Bank Rs 2.5 crore.
The Reserve Bank of India found that J&K Bank had violated several regulations during an inspection. Specifically, the bank had “extended term loans to a Corporation without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects are sufficient to meet the debt servicing obligations,” as well as “failed to ensure that the repayment/servicing of said term loans were not made out of budgetary resources and created financial/non-financial risks.”
Shares of J&K Bank fell 2.99% on Friday, closing at Rs 56.50 on BSE.
