Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹1 crore on Indian Bank by order dated November 18, 2019. The penalty was levied under the Banking Regulation Act, 1949 for non-compliance with RBI directions, particularly on window-dressing of the balance sheet and classification and reporting of frauds. RBI’s inspection also noted issues relating to guarantees/co-acceptances and KYC norms, but the penalty was ultimately based on the two identified contraventions. RBI clarified that the action was based on deficiencies in regulatory compliance and was not meant to pronounce on the validity of any transaction or agreement with customers.