penalty on SBI

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52627

RBI has levied a penalty of Rs.10 million on India’s largest bank, State Bank of India for violation of section 19(2) of the Banking Regulation Act, 1949.

The said section states that no bank shall hold shares in any company whether as pledgee, mortgagee or absolute owner, of an amount exceeding 30% of the paid up share capital of that company or 30% of its own paid up share capital and reserves, whichever is less.

SBI has ostensibly held shares in excess of that limit, though it is not clear in which company. RBI would do better to post the entire adjudication process leading to the penalty on its website, just like other regulators like SEBI, IBBI, IRDAI, CCI do.

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Filed under banking laws

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