RBI slaps penalty of Rs 5 lakh on BoB for CRR/SLR violations

Mumbai, May 30 (UNI) The Reserve Bank of India (RBI) has taken a penal action against the public sector Bank of Baroda (BoB) for violation in the maintenance of cash reserve ratio/statutory liquidity ratio(CRR/SLR).

The apex bank has imposed a fine of Rs 5 lakh(Rupees five lakh) on BoB for violation of CRR/SLR requirements during April 1999 to March 2002, said an RBI press release here today.

During the course of Annual Financial Inspections of the bank, RBI had observed that the bank(BoB) had netted the items representing internal and external liabilities in the inter-office (inter-branch) accounts, resulting in under estimation of the outside liabilities for the purpose of computation of Net Demand and Time liabilities and maintenance of CRR/SLR during the above mentioned period. This, RBI pointed out as the violation of the provisions of Section 24 of Banking Regulation Act, 1949.

When BOB was advised to submit revised returns for the relevant period, it sought exemption on grounds of basic constraint of inadequacy of accounting system in vogue at the relevant time.

Subsequently, RBI issued a show cause notice to BoB, in response to which the latter submitted its written reply. Thereafter, BoB's Chairman&Managing Director also sought personal hearing with RBI, which was granted.

On careful examination of the BoB's submissions, RBI came to the conclusion that the violation was substantiated and accordingly penalised the bank.

UNI SN PM AG1913