RBI imposes Rs 1 crore penalty on Union Bank of India

The Reserve Bank of India (RBI) on November 29 imposed a monetary penalty of Rs one crore on Union Bank of India for violating certain provisions related to sale of stressed assets and reporting of frauds.

The RBI inspection revealed non-compliance with rules on classification of an account as red flag account despite presence of early warning signals and also failure to disclose provisioning for Security Receipts (SRs) in its Annual Report, the central bank 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, the RBI said.

On November 26, the RBI had imposed monetary penalty on country's largest lender State Bank of India (SBI) for violation of certain rules.

The Statutory Inspections for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial positions as on March 31, 2018, and March 31, 2019, the RBI said.

The subsequent examination of the Risk Assessment Reports, Inspection Report, and all related correspondence revealed contravention of rules with respect to the bank held shares in borrower companies of an amount exceeding thirty percent of paid-up share capital of those companies, the RBI said.