RBI Penalises ICICI Bank For Flouting Rules In Sale Of Securities 

RBI imposes monetary penalty on ICICI Bank.

A man walks by an ICICI Bank Ltd. branch in Mumbai (Photographer: Kuni Takahashi/Bloomberg)

The Reserve Bank of India has imposed a monetary penalty on ICICI Bank Ltd. for flouting rules related to the sale of securities.

In a press release issued on Thursday, the regulator said that a monetary penalty of Rs 58.9 crore has been imposed on the lender. The penalty has been imposed due to non-compliance with rules related to the sale of securities held in the bank’s HTM or Held-To-Maturity portfolio. The RBI did not specify what rules had been flouted.

As per the RBI’s rules, securities acquired by the banks with the intention to hold them up to maturity are classified under the HTM bucket. The RBI prescribes limits upto which banks can transfer and sell securities held under this category.

In an email statement, ICICI Bank acknowledged the penalty and specified that ICICI Bank had sold more than the maximum permitted 5 percent from the HTM category.

ICICI Bank had continued with the sales from HTM category for a few weeks during the quarter ended March 31, 2017, due to a genuine misunderstanding on the timing of the applicability of RBI’s direction in this matter. As per RBI guidelines, the Bank had disclosed in its annual report for FY2017 that it had sold more than 5 percent of investments categorised as HTM. However, the Bank had not made the specified additional disclosure at that time.
ICICI Bank Statement

The penalty imposed by the RBI on ICICI Bank is among the largest. The regulator has imposed penalties on a number of banks in recent times for flouting various norms. In March, the RBI imposed a Rs 3 crore penalty on Axis Bank for violation of non-performing asset classification norms, and a Rs 2 crore penalty on Indian Overseas Bank for not complying with the KYC regulations. Prior to that, in October a penalty of Rs 6 crore was imposed on Yes Bank and a Rs 2 crore penalty was imposed on IDFC Bank for violating various norms set by the regulator.

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