Enforcement action have been taken against 41 regulated entities by imposing an aggregate penalty of Rs 61.15 crore between July 1, 2019, and June 30, 2020.
RBI said in its annual report that measures were taken against regulated entities for non-compliance with various regulations. Actions were also taken against breach of the directions on third-party account payee cheques, failure to comply with the provisions of Section 10B of the Banking Regulation Act, 1949, non-compliance with directions contained in risk mitigation plan (RMP) and various others.
The penalty was imposed for non-compliance with or contravention of directions on fraud classification and reporting, non-submission of compliance to risk assessment reports’ (RAR) findings, and not adhering to discipline while opening current accounts, etc.
As many as 26 penal actions were taken against public sector banks with an aggregate fine of Rs 38.35 crore, while eight were introduced against private sector banks with an aggregate fine of Rs 8.55 crore. Concerning cooperative banks, 13 penal actions were taken with the imposition of Rs 9.18 crore. During the period, a total fine of Rs 5 crore was enforced on two foreign banks.
Regarding Deposit Insurance and Credit Guarantee Corporation (DICGC), it plays a crucial role in maintaining the stability of the financial system, mainly in assuring the protection of interests of small depositors and, thus, ensuring public confidence.
DICGC is a wholly-owned subordinate of the RBI established under the DICGC Act, 1961. The deposit insurance offered by DICGC covers all commercial banks.
The DICGC increased the limit of insurance cover for depositors in banks from the previous level of Rs 1 lakh to Rs 5 lakh per depositor with effect from February 4, 2020, intending to providing a greater measure of protection to depositors in banks.
The premium was similarly increased to 12 paise from 10 paise per Rs 100 of quantifiable deposits per annum from the half-year beginning April 1, 2020, to maintain a satisfactory level of the deposit insurance fund.
With the existing limit of deposit insurance in India at Rs 5 lakh, the number of fully protected accounts (231 crores) as at end of March 2020 constituted at 98.3 percent of the total number of accounts (235 crores), as against the international benchmark of 80 percent.
