RBI to slap penalty on SGL account defaulters
16 Jul 2010
The Reserve Bank of India (RBI) has revised the existing guidelines for the use of Subsidiary General Ledger (SGL) account facility with immediate effect.
Accordingly, in the event of bouncing of SGL transfer forms and the failure of the account holder concerned to offer satisfactory explanation for such bouncing, the account holder would be liable to pay penalties.
RBI has prescribed graded monetary penalties for such SGL bouncing, subject to a maximum penalty of Rs5 lakh per instance.
Under the revised guidelines, the applicable monetary penalty on Rs5 crore default will be 0.10 per cent or 10 paise per Rs100 face value for the first three defaults in a financial year (April to March) with a maximum penal amount of Rs50,000;
For the next three defaults in the same financial year - 0.25 per cent or 25 paise per Rs100 face value with a maximum penal amount of Rs1,25,000;
For the next three defaults in the same financial year - 0.50 per cent or 50 paise per Rs100 face value with a maximum penal amount of Rs2,50,000;
On the tenth default in a financial year, the eligible entities will be debarred from using the SGL accounts for undertaking short sales in government securities during the remaining portion of the financial year.
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