A penalty of ₹ 3 crore has been imposed on ICICI Bank Ltd for violating certain instructions, the Reserve Bank of India announced on Monday.

The RBI imposed a monetary penalty of ₹ 3 crore on the ICICI bank for “contravening certain instructions issued by the RBI contained in the main circular on” Prudential standards for the classification, valuation and operation of the investment portfolio by banks “dated July 1, 2015,” the central bank said in a statement.

At the same time, ICICI Bank, in a stock exchange filing, said that the sanction was imposed under certain provisions of the Banking Regulation Act 1949 for the transfer of certain investments from the HTM category to the AFS category. in May 2017.

“The bank had transferred two separate categories of securities on two different dates from HTM to AFS in April and May 2017, which it said was permitted in accordance with the main circular on prudential standards for classification, valuation and reporting. operation of the investment portfolio by the banks as of July 01, 2015, ”said the private sector lender.

The RBI ruled that the transfer of securities for the second time in May 2017 without explicit authorization violated RBI instructions, it added.

The Reserve Bank, however, said the action was based on gaps in regulatory compliance and was not intended to rule on the validity of a transaction or agreement the bank has made with its members. clients.

Giving details, the RBI said a review of correspondence relating to the transfer of securities from one category to another revealed, among other things, a violation of the instructions.

A notice was sent to the ICICI Bank advising it to justify the reasons why no sanction should be imposed on it for non-compliance with the instructions issued by the RBI.

After reviewing the bank’s response to the notice, oral submissions made at the personal hearing, and considering additional submissions made by it, the RBI said it came to the conclusion that the prosecution of failure to comply with the RBI’s instructions was justified and justified the imposition of the penalty. PTI NKD MKJ MKJ