The Hindu Business Line : Bank of Baroda fined Rs 5 lakh

The Reserve Bank of India on Tuesday imposed a fine of Rs 5 lakh on Bank of Baroda for violation of SLR and CRR norms. According to the RBI, the bank "had netted items representing internal and external liabilities in the inter-office (inter-branch) accounts, resulting in under-estimation of outside liabilities for the purpose of computation of Net Demand and Time Liabilities and maintenance of Cash Reserve Ratio and Statutory Liquidity Ratio." This was for the accounting period between April 1999 and March 2002. When the bank was asked to submit revised returns for the relevant period, the bank sought exemption from submission of revised returns, on grounds of basic constraint of inadequacy of accounting system in vogue at the relevant time, said an RBI release.

The RBI then issued a show cause notice to the bank. After examining the bank's submissions, the RBI came to the conclusion that the violation was substantiated and accordingly penalised the bank. When contacted, a senior official of Bank of Baroda said, " it was a question of technicality. Bank had no intention of violating the banking regulations".

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