Case Brief
What Happened
By order dated July 7, 2022, RBI imposed a monetary penalty of Rs 5.72 crore on Federal Bank Ltd. The bank was found non-compliant with RBI’s Financial Services provided by Banks Directions, 2016 after supervisory inspection and related review showed it failed to ensure that no incentive, cash or non-cash, was paid to its staff engaged in insurance broking/corporate agency services by the insurance company. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the charge was substantiated. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.