1. What Constitutes Failure?

Under law, 4 forms are penalized same as false:

1. Non-reporting: Not reporting to CRILC, CIC, CRILC UCBs
2. Inaccurate reporting: Wrong borrower exposure, wrong PAN in order, wrong AFS disclosure
3. Misleading disclosure: MOUs/JVs shown as done when not, revenue inflated
4. Late reporting: Filing unsigned financial statements, filing beyond prescribed timeline under Section 15A(b) SEBI Act

Under Section 15A(b) SEBI Act: If any person required to file return or furnish information, books or other documents within time specified, fails to file within time, liable to penalty.

Under Banking Regulation Act 47A(1)(c): RBI can impose penalty for violation of instructions under Circular.

2. Indian Case Laws - RBI

A. Deutsche Bank AG, India - Rs.50 Lakh - 13 May 2025 - CRILC

RBI order dated 13.05.2025 imposed Rs.50 lakh for non-compliance with directions on Creation of Central Repository of Large Common Exposures and Central Repository of Information on Large Credits - Revision in Reporting.

Finding: Bank did not report credit information of certain borrowers to Central Repository of Information on Large Credits (CRILC).

Same in 2025:

• Punjab & Sind Bank - Rs.68.20 lakh - Did not report borrowers with non-fund based exposure to CRILC
• Surat People's Co-op Bank - Rs.18.30 lakh - Did not report credit information pertaining to certain borrowers to CRILC - UCBs
• Sammaan Finserve - Rs.4.20 lakh - Failed to report credit info of one borrower to CRILC

Principle: Even one borrower omission = penalty.

B. Yes Bank - Rs.29.60 Lakh - May 2025 - Incorrect Disclosures in AFS

RBI penalized Yes Bank Rs.29.60 lakh for incorrect disclosures regarding customer complaints in Annual Financial Statements FY 2023-24. Failure to provide accurate information in statutory financial statements.

C. Axis Bank - Rs.29.60 Lakh - 29 April 2025

RBI imposed penalty for unauthorized operation of internal/office accounts - bank routed unauthorized or unrelated entries through internal accounts and failed to report accurately.

D. Punjab National Bank - Rs.2 Crore - March 2019 - SWIFT Misreporting

RBI slapped penalty of Rs.2 crore on PNB for non-compliance of regulatory directions with regard to SWIFT operations.

Background: PNB Brady House fraud - Nirav Modi / Mehul Choksi - 1212 LoUs worth Rs.12,000 crore issued through SWIFT without being recorded in Core Banking System, invisible to supervisors and auditors. PNB misled RBI, said it had integrated SWIFT with CBS when it had not. RBI had warned in June 2016 about abuse of SWIFT interbank network.

RBI said: Issuance of LoUs not properly maintained by core banking system - direct violation of guidelines. RBI circular abolishing LoUs, compelling SWIFT CBS integration.

This is classic failure to provide accurate information to regulator.

E. Bank of Maharashtra - Rs.32.50 Lakh - 06 Feb 2026

RBI penalized for non-compliance on credit information reporting in respect of Self Help Group members and KYC - Bank did not report SHG member level data to CICs.

3. Indian Case Laws - SEBI

A. Urja Global Ltd - SEBI Adjudication - Misleading Disclosures

Key allegations involved misleading and incomplete disclosures relating to multiple MOUs and JV agreements with Shenxian Ganghang Automobile, FVM Industries, Tesla Power India etc. with Government of UP.

Violations: Incomplete and misleading disclosures, failure of board oversight, ultra vires agreements. Penalty under LODR Regulations.

B. Satyam Computer Services - India's Biggest False Information to Regulators - 2009

Facts: Ramalinga Raju confessed on 7 Jan 2009 in letter to board that he had fabricated accounts totaling Rs.7,136 crores. False cash balances, underreported liabilities, inflated revenue.

From at least 2003 through Sept 2008, Satyam deceived investors by falsifying revenue, income, EPS, interest bearing deposits - falsely reported over $1 billion in revenue.

Regulatory Actions:

• SEBI vs Ramalinga Raju & Ors. (2018): SEBI found promoters violated Section 12A SEBI Act and PFUTP Regulations 3 & 4. Made false and misleading statements.
• SEBI vs PricewaterhouseCoopers (2018): SEBI banned PwC for 2 years from auditing listed companies - failed to exercise professional skepticism, certified false financial statements.
• US SEC Complaint 1:11-cv-00672: Satyam acknowledged falsification
• CBI Court Hyderabad April 2015: Conviction under Section 420 IPC - presenting false image of profitability to regulators

Principle: Filing unsigned financial statements, fabricating invoices, fake sales entries = failure to provide accurate information.

C. G. Moorthi vs Recovery Officer - Madras High Court - Wrong PAN

SEBI adjudicating officer imposed penalty but mentioned incorrect PAN. Madras HC held despite incorrect PAN number, petitioner liable for interest - shows regulators' error doesn't absolve you, but your error is penalized.

D. Company Filing Unsigned Financial Statements - ROC Case

Financial statements filed were found unsigned by directors and statutory auditors. As per Companies Act 2013 Sec 134(1) and 134(6), duly signed statements required. Adjudicating officer did not accept stand and held company and directors committed default.

E. Inland Printers Ltd vs SEBI - 20 Oct 2015 - SAT Appeal No.199 of 2014

Penalty Rs.5 lakh under Section 15A(b) for failing to make annual disclosures under Regulation 8(3) SAST Regulations. SAT upheld.

4. International Case Laws

A. Environment Protection Authority v Davis [2019] NSWLEC 79 - Australia

General Manager of Wollondilly Abattoirs charged under special executive liability provisions of POEO Act with providing false information to EPA. Court underscored importance of adequate governance systems for ensuring compliance with reporting duties under environment protection licence.

Held: Manager personally liable for false reporting.

B. EU Merger Regulation - Fines for Misleading Information

Under EUMR, European Commission can impose fines where parties intentionally or negligently provide misleading or incorrect information during merger review process and in response to requests for information. In March 2024, Commission fined parties for providing inaccurate market share data.

C. RPM International Inc - SEC - USA - Failure to Disclose Government Investigation

SEC charged government contractor RPM and its general counsel for failing to disclose material loss contingency related to government investigation from 2011-2013. Misleading disclosure about investigations.

D. Commerce Commission vs LG - New Zealand

Three former employees failed to provide information in response to statutory notice under Sec 98 Commerce Act. Country Manager instructed Key Account Manager to delete messages that might be considered an issue. Pleaded guilty to wilfully attempting to obstruct course of justice.

5. How to Defend / Comply

RBI Defense Fails If:

• You say "technical glitch" - RBI says maintain accurate reporting
• You say "one borrower only" - RBI says zero tolerance - see Sammaan Finserve Rs.4.2L for one borrower

What Works:

1. CRILC: Reconcile CBS vs CRILC filing every quarter, keep proof of submission
2. AFS Disclosures: Customer complaints, CRILC, internal accounts - cross-check with annual report before filing
3. SEBI LODR: If MOU is non-binding, disclose as non-binding, don't show as revenue
4. Signed Financials: Ensure DSC of directors + auditor signature before filing with ROC

Penalty Range:

• RBI: Rs.1 lakh to Rs.2 crore under BR Act 47A
• SEBI: Rs.1 lakh to Rs.1 crore under Sec 15A, 15HB, plus disgorgement Rs.306m + interest Rs.201m in Satyam
• DPDP: Up to Rs.250 crore for failure to provide accurate breach info