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RBI Penalizes Central Bank of India to the Tune of ₹ 50 lacs.

The RBI vide order dated 10.11.20 sanctioned the Central Bank of India for non-compliance with directions given w.r.t housing loans, with a fine of ₹ 50 lacs.
The RBI had through an earlier circular of 2013 on ““Housing Sector- Innovative Housing Loan Products – Upfront disbursal of housing loans”. The circular primarily forbade the sanctioning of housing loans to builders, without linking disbursals to various stages of project completion.
An off-site inspection of Central Bank’s books revealed to the RBI’s inspectors that the bank had been sanctioning loans contra to the aforementioned directive. Hence, after an opportunity was given to the bank to show cause, the penalty was imposed.

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