Fine has been imposed for the infringement of specific directives.
RBI penalises ICIC bank for ₹3 crores. It is because the private bank had ignored some of the directives.
The central bank and the regulatory body issued a statement, saying that the IDFI owned bank was found to contravention specific directions of the RBI. The RBI issued these directions in Master Circular on ‘Prudential Norms for Classification, Valuation, and Operation of Investment Portfolio by Banks.’ The circular, dated July 1, 2015, requires the bank to frame an Internal Investment Policy Guidelines with the proviso to include Primary Dealer activities approved by respective boards. However, the RBI did not mention when did the violation happen or the exact nature of it.
RBI mentioned that ICICI bank had issues with regulatory compliance and had not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”
In a notice issued to ICICI Bank, it was advised to explain as to why penalty should not be imposed on it for failure to comply with the directions issued by the RBI.
After considering the bank’s response to the notice, oral submissions made within the private listening to and exam of extra submissions made with the aid of it, the RBI stated it got here to the conclusion that the price of non-compliance with RBI instructions was substantiated and warranted imposition of financial penalty.
But the ICICI Bank has said something else. In a stock filing exchange, they said that the penalty is under the provision of Banking Regulation Act, 1949 for shifting specific provisions of Banking Regulation Act, 1949 for moving certain investments from HTM category to AFS Category May 2017.