Case Brief
What Happened
By orders dated January 31, 2019, RBI imposed monetary penalties on four banks for non-compliance with directions on monitoring the end use of funds, exchange of information with other banks, classification and reporting of frauds, and restructuring of accounts. The banks named were Allahabad Bank, Andhra Bank, Bank of Maharashtra, and Indian Overseas Bank. RBI cited failure to adhere to its directions under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, and clarified that the action was based on regulatory compliance deficiencies and not on the validity of customer transactions or agreements.