NEW DELHI: The Reserve Bank of India (RBI) has imposed a stocky penalty of Rs 589 million on ICICI Bank Limited (the bank).
This hefty fine was imposed for non-compliance of directions issued with regard to the direct sale of securities from its HTM portfolio and revelation specified in this concern. In the course of an order dated March 26, the Central Bank imposed the penalty taking into the letdown of the bank to adhere to its directions.
The RBI said that the action is based on the insufficiency in regulatory compliance. It added that the action "is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers." The central bank in its notification has not detailed on how ICICI Bank unsuccessful to meet the terms of its norms.
Banks need to reveal the number of securities they keep under the HTM segment under which the papers are seized until maturity and cannot be used for intraday trading.
Worth mention here, The RBI permits banks to sell securities from HTM subject to certain limits and disclosure rules.
Here is the full text of the RBI notification as ZEE News Displayed:
The Reserve Bank of India (RBI) has imposed through an order dated March 26, 2018, a monetary penalty of Rs 589 million on ICICI Bank Limited (the bank) for non-compliance with directions issued by RBI on direct sale of securities from its HTM portfolio and specified disclosure in this regard. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions/guidelines issued by RBI. 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.
Jose J. Kattoor
Chief General Manager
Courtesy by Zee News.