RBI Slaps Rs.50 Lakh Fine on Deutsche Bank India, Know Why

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹50 lakh on Deutsche Bank AG, India for failing to comply with regulatory guidelines related to reporting large credit exposures. The action was taken under the powers granted to RBI by the Banking Regulation Act, 1949.

According to an official statement released by the central bank, the penalty relates to non-compliance with RBI directions on the ‘Creation of a Central Repository of Large Common Exposures Across Banks’ and the revised framework under the ‘Central Repository of Information on Large Credits (CRILC)’.

Inspection Reveals Regulatory Gaps

The penalty follows findings from the Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted by the RBI, based on the bank’s financials as of March 31, 2024. During the inspection, it was found that Deutsche Bank had failed to report credit information of certain large borrowers to CRILC, a critical database maintained by the RBI to monitor systemic risks and exposure levels in the banking sector.

Show-Cause Notice and Hearing

RBI issued a show-cause notice to the bank, asking it to explain why action should not be taken. After reviewing the bank’s written response and hearing its oral submissions, the RBI concluded that the violation had indeed occurred, justifying the imposition of the fine.

RBI Clarifies Intent

The central bank emphasized that the penalty is related strictly to regulatory non-compliance and should not be seen as a comment on the legality of any specific transaction or agreement Deutsche Bank has with its clients. RBI also noted that this action does not prevent it from taking any further regulatory measures if necessary.

This is yet another reminder of RBI’s strict stance on compliance and the importance of transparency in credit reporting, especially when it involves large exposures shared across banks.