The country’s largest bank, the State Bank of India, has been found flouting several rules in its attempt to cover up non-performing assets (NPAs), according to the RBI’s annual inspection report.
The Reserve Bank of India’s report said that the SBI, amongseveral banks from 2012 to 2015, was found to be flouting anti-money launderingrules, engaging in ‘evergreening’ of loans, suppression of data andsidestepping know your customer (KYC) norms, as reported by Moneylife.
Access to the RBI report was finally granted to Right toInformation (RTI) activist Girish Mittal on the direction of the Supreme Court.The central bank had denied access to the reports on multiple occasions, citingits fiduciary relationship with the banks.
Under Section 35 of the Banking Regulation Act, 1949, theRBI is empowered to undertake annual inspection of all commercial banks.
The RBI report found that several flaws in SBI’s operationlike improper credit need assessment, lack of credit surveillance, shortfall inloan security as advised, and non-enforcement of security given.Deficiencies in the management quality andoverall functioning of the bank were highlighted by the Risk Assessment Reportsyear after year.