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RBI Imposed Rs 2 crore Penalty on SBI

Published on March 18, 2021
Current Context: The Reserve Bank of India (RBI) has imposed a penalty of Rs 2 crore on the State Bank of India (SBI).
RBI Imposed Rs 2 crore Penalty on SBI
  • The penalty was imposed for contravention of certain provisions of Section 10 of the Banking Regulation (BR) Act, 1949.
  • The penalty was also imposed for not following the specific directions issued to SBI on payment of remuneration to employees in the form of commission.
  • As per the RBI’s BR Act section 10 (1) (b) (ii), it is mandated that no banking company shall employ or continue the employment of any person whose remuneration or part of the remuneration takes the form of commission or of a share in the profits of the company.
  • As per the statement from RBI, ‘This process 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’.
  • Static Part: 
    • HQ of RBI and SBI: Mumbai
    • Governor of RBI: Shaktikanta Das
    • Chairperson of SBI: Dinesh Kumar Khara

Question: 

Q.1 What amount of penalty was imposed by RBI on SBI for contravention of certain provisions of Section 10 of the Banking Regulation (BR) Act, 1949?
a. Rs 1 crore
b. Rs 1.5 crore
c. Rs 2 crore
d. Rs 2.5 crore
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