Bank of India: Rs 564 CRORE fine! Details

bank of india: rs 564 crore fine! details

Bank of India has been slapped with a hefty penalty of Rs 564.44 crore by the Income Tax department, the public sector lender revealed on Thursday.

As per PTI, the bank has swiftly responded to the situation and is filing an appeal before the Commissioner of Income Tax, National Faceless Appeal Centre (NFAC) against the order.

In a regulatory filing, the bank disclosed, “The bank has received the order under Section 270A of the Income Tax Act, 1961 from the Income Tax Department, Assessment Unit pertaining to AY2018-19, wherein the penalty of Rs 564.44 crore has been imposed on various disallowances made.” Despite this setback, the bank remains confident in its stance, citing adequate factual and legal grounds to support its position.

“Looking to the precedence/orders of appellate authorities, the bank believes that it has adequate factual and legal grounds to reasonably substantiate its position in the matter,” the bank asserted.

It further expressed optimism, anticipating the entire demand to be quashed. Importantly, Bank of India reassured stakeholders that the penalty would not disrupt its financial, operational, or other activities.

Despite this, Bank of India’s shares closed positively at Rs 137, reflecting a 3.79% increase over the previous close on the Bombay Stock Exchange (BSE). This indicates investor confidence in the bank’s ability to navigate through this challenging situation.

Earlier, Bank of India was fined Rs 1.4 crore for violating the RBI’s directions on interest rates, customer service, and provisions of Credit Information Companies Rules, 2006, as per a TOI report.

Furthermore, Bandhan Bank and Indostar Capital Finance Ltd also got penalised recently. Bandhan Bank was fined Rs 29.55 lakh for non-compliance with certain directions. Meanwhile, Indostar Capital Finance Ltd incurred a penalty of Rs 13.60 lakh for non-compliance with the ‘Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016’, as well as KYC provisions.

These penalties were imposed after a statutory inspection conducted by the RBI to assess the banks’ financial status. It’s essential to understand that these penalties pertain to regulatory compliance matters and do not cast doubt on the legitimacy of any customer transactions or agreements.