The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on (SBI) after an inspection found that the bank had shares debtor companies, as pledgee, in contravention of an amount exceeding 30% of the paid-up share capital of those companies RBI Guidelines,

“Statutory Inspection for Supervisory Evaluation (whereas) was held by the bank reserve Bank of India With reference to your financial position and examination of 31st March, 2018 and 31st March, 2019 Risk Assessment Report, Inspection Report and all related correspondence relating thereto, inter alia, disclosed contravention of sub-section (2) of section 19 of the Act, to the extent the bank has pledged shares in the borrower companies, exceeding thirty per cent. The paid-up share capital of those companies,” RBI said.

RBI said the penalty was imposed after SBI took submissions.

RBI said the action of RBI is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.