RBI imposes Rs 1 Crore penalty on SBI For violating norms

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on State Bank of India (SBI) on November 26, 2021, for violating sub-section (2) of section 19 of the Banking Regulation Act, 1949.

SBI held shares in the borrower companies of an amount exceeding 30 percent of the paid-up share capital of those companies. As per Sub-section (2) of the Banking Regulation Act, 1949, no banking company can hold shares in any company, as pledgee, mortgagee or absolute owner, of an amount exceeding 30 percent of the paid-up share capital of that company or thirty per cent of its own paid-up share capital and reserves.