On May 10, 2025, the State Bank of India was penalised with a fine of 1.73 Crore by the RBI for various charges due to non-compliance with its policies regarding loans, customer protection and account opening regulations under the ‘Banking Regulations Act 1949’.
This shows the fact that the RBI is focused on the country and its civilians, aiming to maintain the rules and regulations put forth by it under any and all circumstances. The largest public sector bank has been levied various charges and was unable to justify their decisions.
Key Highlights & Violations
The following were the violations registered by the RBI:
- Non-compliance with RBI guidelines regarding loans and advances – statutory and other restrictions.
- Failure to follow RBI regulations on Customer protection – limiting liability of customers in unauthorised electronic banking transfers.
- Violation of instructions put forth by the RBI regarding the opening of Current Accounts.
- The penalty was imposed under Section 47A(1)(c), in conjunction with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
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Reason for SBI Penalty
The SBI was found guilty for its non-compliance with RBI policies regarding various functions after the inspection occurred on March 31, 2023, which resulted in RBI fining SBI 1.73 Crore rupees.
Following are the accusations against the bank:
• Provided a bridge loan to an entity secured against receivables from the central or state government in the form of subsidies or reimbursements.
• The bank failed to trace back the funds for certain unauthorised electronic transactions within 10 working days of customer notification and failed to compensate affected customers within 90 days of receiving their complaints.
• The bank also failed to follow the regulations regarding the opening and maintenance of certain current accounts.
The shortcomings were noticed by the RBI and a notice was issued, stating the SBI should provide a clarification regarding the non-compliance incident and why they shouldn’t be penalised.
However, through the following appeal, submission and personal hearings, SBI was not able to justify their actions. Therefore, RBI proceeded with a monetary penalty of ₹1,72,80,000.
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