Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on Karnataka Bank for contravention of the directions contained in RBI Circulars on `Lending to Non-Banking Financial Companies (NBFCS)' and `Bank Finance to Non-Banking Financial Companies (NBFCS)' while sanctioning credit facilities to Infrastructure Leasing and Financial Services (IL&FS) and its group companies.
As bank had already made full loan provision, there is no other financial impact other than the penalty amount.
Karnataka Bank operates as a private sector bank. Its products and services include current account, demand, time, cumulative, cash certificates, insurance linked savings bank deposits, resident foreign currency accounts and senior citizens deposit schemes.
