The Reserve Bank of India (RBI) has fined the State Bank of India (SBI) Rs.1.72 crore (Rs.1,72,80,000) on April 29, 2025. The fine was for not following certain rules related to:
Giving loans and advances
- Protecting customers from unauthorized electronic transactions
- Proper procedures for opening current accounts
This penalty was imposed under RBI’s powers as per the Banking Regulation Act, 1949. RBI had carried out an inspection of SBI based on its financial position as of March 31, 2023. During this review, RBI found that SBI had not followed some of its rules. A notice was sent to SBI asking why it should not be penalized.
After reviewing SBI’s written and verbal responses, RBI decided that the following issues were valid:
- SBI gave a bridge loan to an organization based on money it expected to receive from the government (as subsidies or reimbursements).
- SBI delayed refunds for customers affected by unauthorized online transactions. In some cases, it did not credit accounts within 10 working days or compensate customers within 90 days.
- SBI opened or kept some current accounts in ways that did not follow the RBI’s rules.
RBI clarified that this action is about breaking regulatory rules. It does not mean the bank’s deals with customers are invalid. Also, this penalty does not stop RBI from taking other actions against the bank in the future.
What is a Bridge Loan?
A bridge loan is a short-term loan used to “bridge the gap” between two financial events—typically between the need for immediate funds and the arrival of expected funds. A bridge loan helps someone get quick money now while waiting for larger funds to come in later. Example: A company is expecting a Rs.5 crore subsidy from the government, but needs Rs.1 crore now to keep operations going. It can take a bridge loan from a bank, and repay it once the subsidy arrives.
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