SBI found flouting rules, says finally-released RBI report
The country's largest bank, the State Bank of India, has been found flouting several rules in its attempt to cover up non-performing assets (NPAs), according to the RBI's annual inspection report.
The Reserve Bank of India's report said that the SBI, among several banks from 2012 to 2015, was found to be flouting anti-money laundering rules, engaging in 'evergreening' of loans, suppression of data and sidestepping know your customer (KYC) norms, as reported by Moneylife.
Access to the RBI report was finally granted to Right to Information (RTI) activist Girish Mittal on the direction of the Supreme Court. The central bank had denied access to the reports on multiple occasions, citing its fiduciary relationship with the banks.
Under Section 35 of the Banking Regulation Act, 1949, the RBI is empowered to undertake annual inspection of all commercial banks.
The RBI report found that several flaws in SBI's operation like improper credit need assessment, lack of credit surveillance, shortfall in loan security as advised, and non-enforcement of security given.
Deficiencies in the management quality and overall functioning of the bank were highlighted by the Risk Assessment Reports year after year. IANS