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Rbi imposes Rs 1 Cr penalty on Union Bank of India

The Reserve Bank of India (RBI) on Monday announced that it had fined the Union Bank of India 1 crore crore for failing to comply with regulations. The sanction was imposed by an order dated November 25 for non-compliance with certain provisions of the instructions issued by the RBI contained in Reserve Bank of India (Fraud – Classification and Reporting by commercial banks and select FIs) Directions 2016 and Guidelines on Sale of Assets stressed by banks.

Giving details, the RBI in a statement said that the statutory inspection for the prudential assessment (ISE) of the bank had been conducted by it with reference to its financial situation as of March 31, 2019. Review of the assessment report of the bank risks, the inspection report and all the correspondence relating thereto revealed, among other things, the non-compliance with certain instructions insofar as the non-classification of an account as a Red Flag Account despite the presence of warning signs. early warning and breach of seniority and security receipt (SR) provisioning in its annual reports, the RBI said.

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The central bank added, however, that the sanction is based on breaches of regulatory compliance and is not intended to rule on the validity of a transaction or agreement entered into by the bank with its customers.

First publication: STI


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