The Reserve Bank of India (RBI) has imposed a penalty of Rs 2.2 crore on Indian Overseas Bank for various non-compliances, including income recognition and deficiencies in regulatory compliance. The bank has been found to have contravened certain directions issued by RBI on income recognition, asset classification, and provisioning pertaining to advances, interest rate on deposits, and advisory on Man in the Middle attacks in ATMs. The penalty is based on the bank’s regulatory compliance deficiencies and is not aimed at determining the validity of its transactions or agreements with customers, according to RBI. The bank failed to transfer the minimum mandatory sum of 25% of its disclosed profit to its reserve fund and did not implement control measures for ATMs relating to end-to-end encryption of communication between the ATM terminal/PC and the ATM switch. RBI issued two notices to the bank and, after considering its responses, concluded that the charges of contravention/non-compliance were substantiated and warranted the imposition of the monetary penalty.
RBI fines Indian Overseas Bank with Rs 2.2 crore penalty
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