RBI said, "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 central bank has held that the shifting of securities the second time in May 2017 without explicit permission was in contravention of RBI directions.
RBI had examined ICICI Bank in the matter of shifting of securities from one category to another revealed, inter alia, contravention of the aforesaid directions issued by RBI. Notably, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions issued by RBI.
After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).
At around 12.05 pm, ICICI Bank was trading at Rs605.45 per piece up by Rs8.45 or 1.42% on Sensex.