Case Brief
What Happened
By an order dated January 03, 2024, RBI imposed a monetary penalty of ₹1 crore on Punjab and Sind Bank for non-compliance with its directions on Loans and Advances – Statutory and Other Restrictions. RBI said the bank’s inspection (ISE 2022) revealed that it sanctioned a term loan to a corporation in lieu of budgetary resources for certain projects, without adequate due diligence on project viability and bankability, and the loan repayment/servicing was made out of budgetary resources. The penalty was imposed under the Banking Regulation Act after consideration of the bank’s reply and oral submissions.