Mumbai (India): The Reserve Bank of India (RBI) on Wednesday imposed Rs.1.8 crore monetary penalty on Punjab National Bank (PNB) for ‘deficiencies in regulatory compliance’. “The Reserve Bank of India (RBI) has, by an order dated December 15, 2021, imposed a monetary penalty of Rs.1.80 crore on Punjab National Bank (the bank) for contravention of sub-section (2) of section 19 of the Banking Regulation Act, 1949 (the Act), the RBI said in a statement. “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,” it added. The Statutory Inspection for Supervisory Evaluation (ISE) of Punjab National Bank was conducted by RBI with reference to its financial position as on March 31, 2019 and the examination of the Risk Assessment Report, the Annual Review of implementation of Exposure Management Measures for Financial Year 2019-20 carried out by RBI during July 2020 and all related correspondence pertaining to the same, revealed, inter-alia, contravention of sub-section (2) of section 19 of the Act to the extent the bank held shares in borrower companies, as pledgee, of an amount exceeding thirty per cent of paid-up share capital of those companies. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the aforesaid provisions of the Act, as stated therein. After considering the bank’s reply to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank, to the extent of contravention of the aforesaid provisions of the Act, the central bank said.
