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Wednesday, March 28, 2018

ICICI Bank fined Rs 58.9 crore by Reserve Bank Of India(RBI)

ICICI Bank was penalised heavily by the Reserve Bank of India on Thursday March29,2018 for failing to comply with held-to-maturity guidelines. The RBI, in a press release, stated that it has imposed a penalty of ₹589 million on March 26 for failing to adhere to its directions on direct sale of securities from its HTM portfolio.
Without elaborating on how the bank failed to comply, the RBI said: “The penalty has been imposed in exercise of power vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions/guidelines issued by RBI. 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.”
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 intraday trading. The RBI allows banks to sell securities from HTM subject to certain limits and disclosure rules.

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