Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a show cause notice was issued to the bank.
“After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, that the following charge against the bank was sustained, warranting imposition of monetary penalty,” RBI said.
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Indian Overseas Bank collected loan-related charges in certain PSL accounts, each having sanctioned loan of up to ₹25,000.
The RBI, however added that penalty is based on 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.
(Edited by : Sheersh Kapoor)
