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The State Bank has been receiving a growing number of appeals
for refund/withdrawal of the penalties imposed on irregularities/violations
of laws/ regulations pointed out in its inspection reports.
In order to address this issue, it has been decided that henceforth
discussions held with banks/NBFIs on draft inspection reports
will be reduced in writing by our Banking Inspection Departments
(BIDs ), specifically recording the points contested by the
banks/NBFIs and not agreed to by the BIDs aIongwith reasons/justification
for such disagreements. Any documentary evidence available with
the bank/NBFI in connection with any irregularity/observation
noted in the draft inspection report should, therefore, invariably
be produced during the discussion for consideration of the Inspection
Team. The documents presented/evidences produced after finalization
of the inspection reports will not be entertained.
2)
While the procedure regarding finalization of Inspection Reports
has been streamlined, there is a need to rationalize the tendency
of making repeated appeals to the State Bank for withdrawal/refund
of penalty. With this objective in view, it has been decided
to charge a fee equivalent to 10% of the amount contested
subject to a minimum of Rs. 5,000/- and a maximum of Rs. 50,000/-
for processing the request made by a bank/NBFI for withdrawal/refund
of penalty. This will be payable up front by the bank/NBFI
making such request. However, if any amount of penalty is
determined as refundable due to any calculation mistake or
other lapse on the part of State Bank the processing fee charged
will stand refundable alongwith the amount of refund so determined
to the concerned bank/NBFI.
3) The Banking Supervision Department will decide the appeals
of banks and NBFIs independently on merit of the case giving
due consideration to the views of the aggrieved party and
without referring the matter to the Inspection Team or the
Banking Inspection Department.
Please
acknowledge receipt.
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