RBI slaps Rs 58.9 crore fine on ICICI Bank for failure to meet disclosure norms on sale of securities
The Reserve Bank of India, in a rare move, has imposed a penalty of Rs 58.9 crore on ICICI Bank, the country's biggest private bank and the third biggest overall, for failure to adhere to rules on sale of bonds in the held-to-maturity (HTM) category.
"The Reserve Bank of India (RBI) has imposed through an order dated March 26, 2018, a monetary penalty of ₹589 million on ICICI Bank Limited (the bank) for non-compliance with directions issued by RBI on direct sale of securities from its HTM portfolio and specified disclosure in this regard,"
This is the first instance of a bank being charged with a fine of this quantum for non-compliance of this nature.
This comes a day after ICICI Bank clarified its stance on its loan exposure to Videocon Group and conflict of interest relating to loans to the bank's CEO and MD Chanda Kochhar's husband's firm NuPower Renewables.
"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," RBI added.
The banking regulator did not elaborate on how ICICI Bank failed to comply with its norms.
Banks need to disclose the amount of securities they keep under the HTM segment under which the papers are held until maturity and cannot be used for intra-day trading.
At present, RBI allows banks to sell securities from HTM subject to certain limits and disclosure rules.
Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.
CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
Visit Here- http://www.capitalstars.com/