Reserve Bank of India imposes Rs 589 million penalty on ICICI Bank

NEW DELHI: The Reserve Bank of India (RBI) has imposed a hefty penalty of Rs 589 million on ICICI Bank Limited (the bank) for non-compliance of directions issued with regard to the direct sale of securities from its HTM portfolio and specified disclosure in this regard. Through an order dated March 26, the Central Bank imposed the penalty taking into account the failure of the bank to adhere to its directions.
The RBI said that the action is based on the deficiencies in regulatory compliance. It added that the action “is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.” The central bank in its notification has not elaborated on how ICICI Bank failed to comply with its norms.
Banks need to disclose the amount of securities they keep under the HTM segment under which the papers are held until maturity and cannot be used for intraday trading. The RBI allows banks to sell securities from HTM subject to certain limits and disclosure rules.