RBI slaps Rs 1 crore penalty on LVB, Rs 75 lakh fine on Syndicate Bank for violating norms

Penalty on LVB was imposed because of non-adherence to guidelines on certain IRAC norms

The Reserve Bank of India (RBI) has imposed a penalty of `1 crore on Lakshmi Vilas Bank (LVB) for non-adherence to certain provisions of Income Recognition and Asset Classification (IRAC) norms.

In a disclosure to stock exchanges, LVB said the fine was imposed for non-adherence to guidelines on IRAC norms and divergence in respect of two non-performing assets accounts aggregating to `169.50 crore for the year ended March 2017.

In a note, the RBI said, the statutory inspection of the bank with reference to LVB financial position as on March 2017 revealed non-compliance on IRAC norms. Based on the inspection report, a notice was issued to LVB, advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions.

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After considering reply of Lakshmi Vilas Bank to the notice and examination of additional submission, the RBI concluded that the aforesaid non-compliance warranted imposition of monetary penalty.

In a similarly worded release, the central bank said a monetary penalty of `75 lakh has been imposed on Syndicate Bank for non-compliance with the directions issued by the RBI on frauds classification and reporting; innovative housing loan products wherein upfront disbursal of loans was done.

(With inputs from PTI)