Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 40 million on Bank of India, a state-owned commercial bank for contravention of norms, including one related to 'Frauds - Classification and Reporting'. RBI’s statutory Inspection for Supervisory Evaluation (ISE) of Bank of India was conducted with reference to its financial position as on March 31, 2019.
The bank had also conducted a review and submitted a Fraud Monitoring Report (FMR) dated January 1, 2019 pertaining to detection of fraud in an account.
Examination of the risk assessment report pertaining to the ISE and the FMR revealed non-compliance with/contravention of directions, viz., breach of stipulated transaction limits; delay in transfer of unclaimed balances to DEA Fund; delay in reporting a fraud to RBI and sale of a fraudulent asset.
In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for such violations of the said directions.
After considering the bank's reply to the notice, oral submissions made in the personal hearing and examination of additional submissions submitted by the bank, RBI came to the conclusion that the charges of non-compliance with/contravention of the aforesaid RBI directions were substantiated and warranted imposition of monetary penalty.
Shares of the bank declined Rs 2.15, or 2.54%, to trade at Rs 82.50. The total volume of shares traded was 954,992 at the BSE (12.41 p.m., Tuesday).