The Reserve Bank of India (RBI), through an order dated April 29, 2025, has imposed a monetary penalty of ?1,72,80,000 (Rupees One Crore Seventy-Two Lakh Eighty Thousand) on State Bank of India (SBI) for non-compliance with specific regulatory directions. These include guidelines related to ‘Loans and Advances – Statutory and Other Restrictions’, ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’, and ‘Opening of Current Accounts by Banks – Need for Discipline’.

The penalty has been levied under the powers conferred upon RBI by Section 47A(1)(c) of the Banking Regulation Act, 1949, read with Sections 46(4)(i) and 51(1).

This action follows the Statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank, conducted with reference to its financial position as of March 31, 2023. Based on supervisory findings indicating non-compliance with the aforementioned directions, RBI had issued a notice to SBI asking it to show cause why a monetary penalty should not be imposed.

After reviewing the bank’s written and oral submissions, RBI concluded that several lapses had occurred. These included the granting of a bridge loan to an entity against receivables from the government by way of subsidy or reimbursement, delays in crediting (shadow reversal) the amount involved in unauthorised electronic transactions to certain customer accounts, failure to compensate some customers within the stipulated 90 days, and the opening and maintenance of certain current accounts in violation of regulatory norms.

RBI clarified that the penalty is based on deficiencies in regulatory compliance and does not question the validity of any individual transaction or agreement between the bank and its customers. Additionally, this action does not preclude further enforcement measures that the RBI may undertake.