Indian Bank fined ₹5.85 lakh by Central Bank of Sri Lanka for non-compliance
December 23, 2024
Indian Bank has stated that it has implemented necessary preventive measures to ensure compliance and avoid similar incidents in the future. Shares of Indian Bank ended at ₹537.35, up by ₹0.85, or 0.16%, on the BSE.
Public sector lender Indian Bank Ltd on Monday (December 23) said the financial intelligence unit of the Central Bank of Sri Lanka has imposed a monetary penalty of LKR (Lankan rupee) 2 million (approximately ₹5.85 lakh) on the bank for failing to comply with the provisions of Sri Lanka's Financial Transactions Reporting Act.
"...we have to inform you that the Central Bank of Sri Lanka -Financial Intelligence Unit has imposed a monetary penalty of Sri Lankan Rupees (LKR) Two Million (LKR 2,000,000) i.e. approx. Indian Rupees (INR) Five Lakh Eighty Five Thousands (₹5.85 Lakh) on the bank for failure to conform to the provisions of Financial Transactions Reporting Act, No.6 of 2006 (FTRA) of Sri Lanka and rules," Indian Bank said in a regulatory filing.
The penalty pertains to non-conformity with the regulatory framework under the FTRA and associated rules and regulations. Indian Bank operates in Sri Lanka through two branches, located in Colombo and Jaffna.
In response to the penalty, Indian Bank has stated that it has implemented necessary preventive measures to ensure compliance and avoid similar incidents in the future. "The bank and its aforesaid Branches operating in Sri Lanka have taken necessary preventive actions to avoid such recurrence in future," the lender said.
For the second quarter, Indian Bank posted a 36% year-on-year (YoY) increase in net profit, which reached ₹2,706 crore, up from ₹1,988 crore in the same period last year. This growth was supported by a decline in provisions and a rise in net interest income (NII).
NII increased by 8% YoY to ₹6,195 crore from ₹5,740 crore, indicating sustained momentum in core lending activities. In terms of asset quality, Indian Bank showed a marked improvement. Gross non-performing assets (NPA) decreased to 3.48% from 3.77% on a quarter-on-quarter (QoQ) basis, while net NPA stood at 0.27%, down from 0.39% in the previous quarter.
Provisions were significantly reduced in Q2, totalling ₹1,099 crore, down from ₹1,258 crore on a quarterly basis and ₹1,551 crore YoY, highlighting the bank’s prudent approach in managing its loan portfolio.
Shares of Indian Bank ended at ₹537.35, up by ₹0.85, or 0.16%, on the BSE.
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