The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 57.50 lakh on state-run Indian Overseas Bank for non-compliance with certain directions.  

Indian Overseas Bank failed to report certain instances of frauds involving ATM card cloning and skimming to the RBI within three weeks from the date of detection, the central bank said in a notification.

The bank also linked certain floating rate loans to micro and small enterprises, extended by it on or after October 1, 2019, to MCLR (marginal cost of funds-based lending rate) or base rate instead of an external benchmark.

The Reserve Bank said Indian Overseas Bank failed to ensure integrity and quality of data when it did not report credit information in CRILIC on certain borrowers having aggregate exposure of Rs 5 crore and above.

The regulator conducted a statutory inspection for supervisory evaluation of the bank regarding its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.

Following this, the RBI issued a show cause notice to the bank, asking it why a penalty should not be imposed on it for failure to comply with the directions issued by the central bank.

"After considering the bank's reply to the notice and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions," the RBI said.