This is the first instance of a bank being charged with a fine of this quantum for non-compliance of this nature.
The Reserve Bank of India, in a rare move, has imposed a penalty of Rs 58.9 crore on ICICI Bank, for failure to adhere to rules on sale of bonds in the held-to-maturity (HTM) category.
This is the first instance of a bank being charged with a fine of this quantum for non-compliance of this nature.
“ICICI Bank had continued with the sales from HTM category for a few weeks during the quarter ended March 31, 2017, due to a genuine misunderstanding on the timing of the applicability of RBI’s direction in this matter,” ICICI Bank said in a clarification on Thursday.
RBI norms require the bank to disclose the market value of HTM investments and specify the difference between book value and market value, if sale of HTM securities exceeds 5 percent of overall HTM investments.
“As per RBI guidelines, the bank had disclosed in its annual report for FY2017 that it had sold more than 5 percent of investments categorised as HTM. However, the bank had not made the specified additional disclosure at that time,” the private sector lender said.
The bank has been making the specified disclosure in all its financial results since the June quarter last year, it added.
This comes a day after ICICI Bank clarified its stance on its loan exposure to Videocon Group and conflict of interest relating to loans to the bank’s CEO and MD Chanda Kochhar’s husband’s firm NuPower Renewables.
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.
At present, RBI allows banks to sell securities from the HTM category, subject to certain limits and disclosure norms.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
