Recorded RBI impact
Fine: Rs 1.00 Cr
Monetary penalty · Fresh imposition
Published by RBI
20 Oct 2016
Case Brief
The Reserve Bank of India imposed a penalty of ₹10 million on Credit Agricole Corporate and Investment Bank (India) under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. RBI said the bank had provided services to and earned fees from its outsourcing agency, Credit Agricole CIB Services Pvt. Ltd., in a manner not permitted under Section 6(1). After examining the bank's reply, personal submissions and records, RBI concluded the violation was established and penalty was warranted.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949 after concluding that Credit Agricole Corporate and Investment Bank (India) contravened Section 6 of the Act. The bank was found to have provided a host of services to and earned fees from its outsourcing agency, Credit Agricole CIB Services Pvt. Ltd., activities that were not permissible under Section 6(1). A show-cause notice had been issued, and after considering the bank's reply, personal submissions and records, RBI held the violation established and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and the finding of non-compliance under Section 6. The order does not describe any suspension or operational restriction, but it signals regulatory concern over the bank's outsourcing-related activities and fee arrangements.
Regulatory Basis
- Section 47 (A) (1) (c) read with Section 46(4) (i) of the Banking Regulation Act, 1949
- Section 6 of the Banking Regulation Act, 1949
- Section 6(1) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 Cr
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank