The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 crore against ICICI Bank for violating norms related to classification, valuation and operation of investment portfolio by banks.
The central bank said the action against the private lender was in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949.
“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI clarified in a statement on Monday.
RBI informed that an examination of correspondence in the matter of shifting of securities from one category to another revealed, inter alia, contravention of the RBI’s Master Circular on ‘Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks’ dated July 01, 2015.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions issued by RBI, the central bank informed.
“After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty,” it further added