SOURCE - REUTERS
The elevating figures of Non-Performing Assets (NPA) across Indian banks, which is likely to create financial stress in the coming fiscal year 2022 to 11-12% revealed by S&P Global rating research. To cut back such an upsurge, the Central Bank of India came up with certain strategic measures to control the rising number.
With rising numbers of NPAs in Non- Banking Financial Company (NBFC), the Reserve Bank Of India has asked banks to submit lending data of loans provided to NBFC above a certain amount to the Central Repository of Information on Large Credits (CRILC). Due to the non-adherence and non-transparency to such provision directed by the central bank, the bank on Wednesday issued notice to impose a penalty on 14 banks.
The collective amount levied on 14 banks is Rs. 14.5 crore. The following banks which are fined with Rs.1 crore amount are 12 and State Bank of India is fined with Rs. 50 lakhs and Bank of Baroda with Rs. 2 crores. According to RBI, these banks have failed to comply with the rule of creating a central repository of large common exposure.
According to the statement by RBI, these banks have violated 19(2) of the RBI Act, which states no company should hold shares in any company, as a pledge, mortgagee, or absolute owner, an amount exceeding 30% of the paid-up share capital of that company. It has also violated section 20(1) of the banking regulation act, 1949.