The Reserve Bank of India fined the State Bank of India ₹1.72 crore for violating loan regulations, customer protection, and current account management. The penalty, announced on May 9, 2025, follows a statutory inspection (ISE 2023) and subsequent hearings under the Banking Regulation Act, 1949.
Key Violations Identified
- Loans & Advances: The State Bank of India provided a bridge loan to an organization based on anticipated government subsidies and reimbursements, which contravenes the Reserve Bank of India’s guidelines on ‘Statutory and Other Restrictions.’
- Customer Protection: The bank failed to (i) credit reimbursements for unauthorized electronic transactions within 10 working days and (ii) compensate affected customers within 90 days of complaint receipt.
- Current Accounts: SBI opened/maintained current accounts contravening RBI’s discipline requirements.
The Reserve Bank of India exercised its authority under Sections 47A(1)(c), 46(4)(i), and 51(1) of the Banking Regulation Act of 1949 to enforce the penalty. SBI submitted written and oral defenses during hearings but failed to overturn the findings.
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Regulatory Context:
The violations were identified during RBI’s ISE 2023 inspection, which assessed SBI’s financial position as of March 31, 2023. A show-cause notice was issued, prompting the bank’s response and subsequent personal hearing. RBI clarified the penalty addresses procedural lapses and does not invalidate SBI’s customer transactions or agreements.
SBI’s Compliance & Market Impact
SBI disclosed the penalty under SEBI Listing Regulations (Regulation 30), affirming no material operational/financial impact. The bank’s shares closed at ₹845.50 on NSE post-disclosure, reflecting muted market reaction.
Aruna N Dak, SBI’s Compliance & Company Secretary, stated: “We remain committed to strengthening governance frameworks and adhering to regulatory guidelines.”
Stay tuned for further updates on market movements and financial insights.
Disclaimer: The information provided is for educational purposes only and does not constitute financial advice. We are not registered financial advisors. Please conduct your own research and consult a qualified advisor before making investment decisions. Any investment decisions you make based on this information are solely at your own risk.
Also read: Tata Chemicals Approves 110% Dividend and ₹200 Crore Fundraising Plan
Published on: May 9, 2025 / M Vishnu
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