RBI imposes monetary penalty on South Indian Bank

The RBI has imposed a penalty of Rs 59.20 lakh on South Indian Bank for non-compliance with certain directions on 'interest rate on deposits' and 'customer service in banks'. A statutory inspection for supervisory evaluation of the bank was conducted by the Reserve Bank with reference to its financial position as of March 31, 2023.

Based on supervisory findings of non-compliance with RBI directions and related correspondence, a notice was issued to South Indian Bank Limited. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found that the charges against the bank were sustained, warranting the imposition of a monetary penalty.

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The RBI said the bank levied penal charges for non-maintenance of minimum balance/average minimum balance without notifying certain customers by SMS/e-mail or letter.

South Indian Bank also marked lien against certain NRE savings deposit accounts, the central bank said. The RBI further said the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to be pronounced upon the validity of any transaction or agreement entered into by the bank with its customers.

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