MUMBAI: The Reserve Bank of India fined the state-owned Indian Overseas Bank (IOB) Rs 57.5 lakh on Friday for failing to comply with several standards, particularly those concerning the categorization and reporting of frauds. The Reserve Bank of India (RBI) decided to levy the fine as a result of the mandatory inspection of the bank, which was conducted with reference to the bank’s financial status as of the end of March 2020, and the assessment of reports.
The central bank provided more information and stated that the IOB failed to disclose certain cases of fraud involving ATM card cloning or skimming to the RBI within three weeks of the date when the crime was discovered.
The bank also failed to maintain the accuracy and quality of the data when it did not submit credit information in CRILC on certain borrowers who had aggregate exposure of Rs 5 crore or more. This was another instance of the bank failing to comply with regulations.
The bank also connected some variable rate loans to Micro and Small Enterprises, which it extended on or after October 1, 2019, to the MCLR/Base Rate rather than an external benchmark. These loans were given out by the bank after October 1.
However, the Reserve Bank of India (RBI) stated that the penalty was based on the failures in regulatory compliance and that it was not meant to pronounce upon the legitimacy of any transaction or arrangement that the bank had entered into with its clients.