Shares of State Bank of India fell 4.09% at Rs 470.50/piece on BSE
The Reserve Bank of India (RBI) today imposed a monetary penalty of Rs 1 on the country’s largest lender State Bank of India (SBI) for holding shares in companies. borrowers in an amount exceeding 30% of the paid-up share capital of such companies. The RBI has imposed the penalty for violating subsection (2) of section 19 of the Banking Regulations Act, 1949, according to their statement on Friday, November 26.
Subsection (2) of the Bank Regulations Act, 1949, provides that no bank may hold shares in any company, either as a pledger, mortgagee or owner. absolute ownership, for an amount exceeding 30% of the contributed share capital of that company. or 30% of the contributed share capital and its own reserve fund.
RBI conducted an examination of the ‘financial position’ of the state-owned lender on March 31, 2018 and March 31, 2019, and also examined risk assessment reports, inspection reports .
“….the examination of risk assessment reports, inspection reports and all related correspondence concerning the same, disclosed, between different points, contrary to the section (2) of section 19 of the Act to the extent that a holding bank RBI said in the borrower’s statement, as a pledgee, in an amount exceeding 30% of the contributed share capital of the those companies.
The RBI then issued a notice to the State Bank of India, asking why a penalty should not be imposed on it for contravening the instructions.
After reviewing the bank’s response to the notice, the RBI said it “has reached the conclusion that it has demonstrated an alleged violation of the foregoing provisions of the Act”, and subsequently imposed penalties. monetary fine.
On Friday, November 26, shares of State Bank of India fell 4.09% at Rs 470.50 per unit on BSE. State Bank of India opened at Rs 486.75, registering an intraday high of Rs 487.60 and an intraday low of Rs 467.25 during today’s trading session.
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