Srinagar, Aug 02 (KNS): The Reserve Bank of India (RBI) has imposed monetary penalty of Rs one crore on Corporation Bank for non-compliance with the directions issued by the RBI on Cyber Security Framework in Banks and Frauds Classification and Reporting by commercial banks and select FIs.

“This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949 (the Act). This action is based on the 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,” Yogesh Dayal, Chief General Manager RBI, said in a statement to KNS.

BACKGROUND

A report of cyber security incident submitted by the bank about fraudulent transactions using a cancelled debit card revealed that the bank had failed to comply with the directions issued by RBI on Cyber Security Framework in Banks and Frauds Classification and Reporting by commercial banks and select FIs. A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions issued by RBI. After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty. (KNS)