Millennium Post

RBI completes probe, says it will act against errant banks

Reserve Bank of India (RBI) on Thursday said it has completed investigations against banks following the Cobrapost expose and will take action if they are found guilty of violating prudential banking norms.

'We have done investigations, we have prepared an internal report. There are processes to be followed to take investigations to its logical closure...’

'The first is action against individual institutions who are involved in practises which are not consistent with the banking regulation and prudential banking',  RBI governor Subbarao said while addressing a press conference after the RBI's central board meeting here.

Web portal Cobrapost in its sting operation had exposed the  alleged money laundering and other wrong doings by several public and sector financial institutions ranging from country's largest bank SBI to the youngest lender Yes Bank.

The central bank, Subbarao further said, has already taken systemic action to deal with the problem and many of them were announced in the annual policy document unveiled last week.

As far as individual banks are concerned, he said, 'we got to follow procedure' before deciding on imposing penalty on them for violating the prudential banking norms. On when the action was likely to be taken against erring banks, the RBI Governor said, 'not possible to indicate time frame as there are processes involved.'
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