RBI Penalty on South Indian Bank: The Reserve Bank of India said that the penalty imposed on South Indian Bank is based on deficiencies in statutory and regulatory compliance and is not intended to affect the validity of any transaction or agreement entered into by the bank with its customers.
The Reserve Bank of India (RBI) has imposed a fine of Rs 59.20 lakh on South Indian Bank. The bank gave this information on Friday. The penalty has been imposed due to non-compliance with certain instructions on interest rates on deposits and customer service in banks.
RBI said that the bank imposed penalty charges for non-maintenance of minimum balance / average minimum balance without informing some customers through SMS / e-mail or letter. South Indian Bank has also marked claim on some NRE savings deposit accounts.
The Reserve Bank of India had conducted an inspection for supervisory evaluation of South Indian Bank regarding the financial position of the bank as on March 31, 2023. A notice was issued to South Indian Bank Limited on the basis of non-compliance with RBI instructions and related correspondence.
After considering the bank’s reply to the notice and the oral submissions made during the personal hearing, RBI found that the allegations leveled against the bank are correct, for which monetary penalty is required.
RBI said that this penalty is based on deficiencies in statutory and regulatory compliance and is not intended to have any effect on the validity of any transaction or agreement entered into by the bank with its customers.
Profit increased by 18% in Q2
South Indian Bank’s net profit in the July-September 2024 quarter increased by 18.15 percent year-on-year to Rs 324.69 crore. A year ago, the profit was Rs 274.81 crore. Operating profit increased by 19.51 percent to Rs 550.25 crore as against Rs 460.44 crore in the September 2023 quarter. Gross NPA declined 56 bps year-on-year to 4.40 percent in the September 2024 quarter from 4.96 percent a year ago. Net NPA declined 39 bps to 1.31 percent from 1.70 percent a year ago.