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RBI imposes Rs 1 crore fine on Union Bank of India

RBI imposes Rs 1 crore fine on Union Bank of India

Earlier this month, RBI has also imposed a monetary penalty of Rs 1 crore on State Bank of India, the country's largest PSB, for certain irregularities. 

Reserve Bank of India Reserve Bank of India

The Reserve Bank of India on Monday imposed a fine of Rs 1 crore on Union Bank of India for non-compliance with the certain provisions relating to 'Sale of Stressed Assets by Banks' and 'Fraud - Classification and Reporting by commercial banks and select FIs)'.

The central bank, in a statement, said, "This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers."

It further said that the Statutory Inspection for Supervisory Evaluation (ISE) of Union Bank of India was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019) and the examination of the Risk Assessment Report, Inspection Report and all the related correspondences pertaining to ISE 2019, revealed, inter alia, non-compliance to the extent of (i) failure to classify an account as Red Flag Account despite presence of Early Warning Signals and (ii) failure to disclose ageing of and provisioning for Security Receipts (SRs) in its Annual Report. 

In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the RBI directions, it added.

"After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions," the central bank further added.

Earlier this month, RBI has also imposed a monetary penalty of Rs 1 crore on State Bank of India for certain irregularities.