Here’s Why SBI Opened in Red on Monday

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Here’s Why SBI Opened in Red on Monday

By Malvika Gurung

Investing.com -- Shares of the country’s largest lender State Bank of India (NS: SBI ) declined 2.5% to Rs 458.75 apiece at 9:19 am on Monday, after RBI announced to impose a penalty of Rs 1 crore on the public lender,  on November 26.

The central bank charged SBI for holding shares in the borrower companies of an amount exceeding 30% of the paid-up share capital of those companies. 

According to Sub-section (2) of section 19 of the Banking Regulation Act, 1949, no banking company is allowed to hold shares in any company, either as pledgee, mortgagee or absolute owner, of an amount more than 30% of the paid-up share capital of that company, or 30% of its own paid-up share capital and reserves. 

RBI conducted two inspections of SBI’s financial positions, one on March 31, 2018, and the other one on March 31, 2019, in addition to examining its risk assessment reports.

As per a syndicated news feed, RBI issued a notice to the state-run lender after the inspection, which the latter substantiated, followed by a monetary penalty charged on the bank.

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  • arvind mohan thapliyal @arvind mohan thapliyal
    but the latter part of day it  slowly become positive.
    Like 0

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