The RBI conducted a statutory inspection of bank’s books and it’s inspection report revealed that that Standard Chartered had failed to credit the amount involved in the unauthorised electronic transactions back to customer accounts. The regulator’s inspection also revealed that the bank was not reporting cyber security incidents within the prescribed time period.
The RBI which conducted a statutory audit in the bank’s books found that the foreign lender was also non-compliant in authorising the direct sales agents to conduct KYC verification, and failed to ensure integrity and quality of data submitted in Central Repository of Information on Large Credits (CRILC).
“A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of directions,@ the RBI said. “After considering the bank’s replies to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention was substantiated and warranted imposition of monetary penalty on the bank.”
