The Reserve Bank of India announced on 9 May 2025 that it had imposed a monetary penalty of ₹1.72 crore (₹1,72,80,000), roughly US$200,000, on State Bank of India, the country's largest lender, for non-compliance with certain RBI directions. The penalty was imposed by an order dated 29 April 2025.

The central bank said SBI had failed to comply with directions issued under three sets of rules: 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.

THREE CHARGES SUSTAINED

According to the RBI, SBI extended a bridge loan to an entity against amounts receivable from the central or state government by way of subsidy or reimbursement. In the area of customer protection, the bank failed to shadow-credit amounts involved in unauthorised electronic banking transactions within 10 working days of notification by certain customers, and failed to compensate certain customers within 90 days of receiving their complaints. The RBI also found that SBI had opened or maintained certain current accounts in breach of the applicable regulatory requirements.

The findings arose from the Statutory Inspection for Supervisory Evaluation (ISE 2023) that the RBI conducted at the bank. Following the inspection, the central bank issued a notice asking SBI to show cause why a penalty should not be imposed. After considering the bank's reply, its additional submissions and oral submissions made during a personal hearing, the RBI concluded that the charges were sustained and that a monetary penalty was warranted.

ACTION UNDER BANKING REGULATION ACT

The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. The RBI said the action was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. It added that the imposition of the monetary penalty was without prejudice to any other action it might initiate against the bank.