The Reserve Bank of India (RBI) has taken significant action against South Indian Bank, imposing a fine of ₹59.20 lakh for failing to adhere to regulations concerning interest rates on deposits and customer service standards. The bank’s stock closed 1.52% lower at ₹24.01 on Friday, November 8.
Penalty Imposed After Regulatory Inspection
RBI carried out a statutory inspection to assess the bank’s financial position as of March 31, 2023. Following the inspection, the central bank found that South Indian Bank had violated certain rules, leading to the fine. The bank’s response to the notice, as well as oral submissions during the personal hearing, were considered before confirming the necessity of a monetary penalty.
The violations included charging penalty fees for failing to maintain the minimum balance without adequately informing customers via SMS, email, or letter. RBI clarified that this penalty was based on non-compliance with statutory and regulatory requirements, and it does not affect the validity of any agreements or transactions between the bank and its customers.
South Indian Bank Stock Performance
South Indian Bank’s stock has seen mixed performance recently. It has dropped by over 3% this week, but has gained more than 6% in the past two weeks. Over the last 3 months, the stock is down by 4%, 13% over six months, and 3% year-to-date. However, it has returned 6% in the last year, 72% over the past two years, and an impressive 177% over the past three years.
