The Reserve Bank of India (RBI) has imposed a monetary penalty of 2 crores on the State Bank of India (SBI) for contravention of certain provisions of Section 10 of the Banking Regulation (BR) Act, 1949. The central bank’s specific directions issued to the bank on payment of remuneration to employees in the form of commission. This penalty has been imposed in exercise of powers vested with RBI under the provisions of the BR Act. The penalty is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
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RBI said the statutory inspection of the bank with reference to its financial position as of March 31, 2017, and March 31, 2018, and the Risk Assessment Reports (RARs) pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to its employees in the form of commission, revealed, inter alia, contravention of the provisions of the Act and aforesaid specific directions issued by RBI.
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