The Reserve Bank of India (RBI) has imposed a fine of Rs 58.9 crore on ICICI Bank for failing to follow rules related to sale of securities in the Held-to-Maturity (HTM) category.
“RBI has imposed through an order dated March 26, 2018, a monetary penalty of Rs 589 million on ICICI Bank for non-compliance with directions issued by RBI on direct sale of securities from its HTM portfolio and specified disclosure in this regard,” the central bank said in a notification on Thursday.
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HTM securities are typically bonds purchased with the intention of holding the investments till maturity and not used for trading. According to guidelines, at least 20 per cent of a bank's deposit must be held in bonds in HTM category.
A direct sale of securities from the HTM portfolio may have thus resulted in violation of the regulations.
“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI clarified.
The RBI action comes at a time the country's largest lender is already under the lens of investigative agencies over alleged conflict of interest. Videocon chairman Venugopal Dhoot had set up a company with Deepak Kochhar, husband of ICICI Bank MD and CEO Chanda Kochhar. Reportedly, Dhoot transferred the ownership of that company to a trust owned by Deepak Kochhar just six months after Videocon Group got a loan of Rs 3,250 crore from ICICI Bank.
The lender has firmly backed Chanda Kochhar, terming the recent reports as “malicious and unfounded” rumours.