(MENAFN- KNN India) New Delhi, Nov 21 (KNN) The Reserve Bank of India (RBI) is planning to carry a complete review of its penalty system, a senior regulatory source told Business Standard.
The potential changes might involve increasing the penalty amounts, this could be in accordance with the size of the regulated entities, their importance to the system, and the number of repeat offences, it added.
The review may also explore clawback of payouts to CEOs and key management personnel (KMP), it said.
Imposing additional capital charges on regulated entities is also speculated, as per the report.
The initiative comes as the apex bank looks to enhance corporate governance standards within regulated entities and emphasize its importance, it added.
In a meeting with the boards of state-run and private banks in May, RBI Governor Shaktikanta Das discussed governance issues, ethics, the role of boards, and supervisory expectations. This is being viewed as an extension of that focus.
On November 16, the RBI imposed a monetary penalty of Rs 90.92 lakh on Axis Bank for non-compliance with certain directions issued by the apex bank on 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016', 'Loans and Advances – Statutory and Other Restrictions', 'Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks' and 'Code of Conduct for Opening and Operating Current Accounts'.
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