BANKING AND ECONOMY
The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 59 lakh on Korean bank ‘KEB Hana Bank for non-compliance with RBI guidelines related to 'interest rates on deposits.
The RBI imposed a penalty on the Korean banks as it wasn’t following the directions issued by the RBI in "Reserve Bank of India (Interest Rate on Deposits) Directions, 2016".
The penalty was based on deficiencies in regulatory compliance. It was not intended to pronounce upon the validity of any transaction or agreement entered by the bank with its customers.
The statutory inspection for supervisory evaluation of KEB Hana Bank was conducted by RBI with reference to its financial position as of March 31, 2020. As a result of this inspection, the Central bank found that the interest rates were not uniform for all customers and were also discriminatory in nature to its customers. The interest rates offered by the lender were not consistent and transparent and the details of interest rates were not available in the Core Banking System for supervisory review.
A notice was issued to the bank by the RBI, advising it to show cause as to why a penalty should not be imposed on it for non-compliance with the RBI directions.