The Reserve Bank of India has imposed a monetary penalty of 1 million rupees (US$14,388) on South Indian Bank Ltd for disobeying its directions regarding guarantees and co-acceptances.

South Indian Bank was founded in 1929 and has a substantial private banking and wealth management arm. In the run-up to the fine, the Reserve Bank had received allegations from a government department and a private party alleging that the bank had not paid "invoked bank guarantees." After some investigation, it found that the bank had broken the rules and issued a notice that instructed the bank to show cause as to why it should not impose a penalty on it. It considered the bank’s reply (details unknown), which consisted of oral  submissions followed by another submission. It then discounted them and imposed the penalty.

RBI derived its power to levy the fine from section 47A(1)(c) Banking Regulation Act 1949, read together with s46(4)(i). It did so on 13 June.