A ₹2-crore monetary penalty has been imposed on Deutsche Bank by the Reserve Bank of India (RBI) for non-compliance in certain provisions of directions relating to Reserve Bank of India’s Interest Rate on Deposits Directions, 2016.

In its statement, the RBI mentioned the action is based on the deficiencies in regulatory compliance. And it is not being intended to pronounce upon the validity of any transaction/agreement entered into by the bank with its customers. Under the provisions of the Banking Regulation Act, 1949, and the exercise of powers vested in the RBI, this penalty was imposed on Deutsche Bank. The RBI observed that the statutory inspection of the bank concerning its financial position as of March 31, 2019, and the Risk Assessment Report pertaining thereto revealed, inter-alia, non-compliance with the above-mentioned directions issued by the RBI. A notice was issued to the bank asking them to point out why the penalty shouldn’t be imposed on them for the non-compliance with the directions.

After consideration of the bank’s reply to the notice, and oral submissions made in the personal hearing, and also with the examination of additional submissions, the RBI inferred that the charge of non-compliance with aforesaid RBI directions was validated and justified the imposition of monetary penalty.