Case Brief
What Happened
By an order dated June 22, 2023, RBI imposed a monetary penalty of Rs 1.45 crore on Bank of Maharashtra. The penalty was imposed for non-compliance with RBI directions on 'Loans and Advances – Statutory and Other Restrictions' and with the advisory on 'Man in the Middle (MiTM) Attacks in ATMs'. RBI said its inspection and related review found that the bank had sanctioned a term loan to a corporation to substitute budgetary resources for certain projects, had not undertaken adequate due diligence on the viability and bankability of those projects, and had allowed repayment/servicing to be made out of budgetary resources. RBI also found that the bank failed to implement required ATM control measures, including end-to-end encryption between the ATM terminal/PC and the ATM switch, within the prescribed timeline. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.