Dynamite News RBI imposes Rs 1 crore penalty on Union Bank of India for non-compliance with certain provisions of its directions
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on the Union Bank of India (UBI) for non-compliance with certain provisions of its directions relating to fraud classification and reporting and sale of stressed assets.
New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on the Union Bank of India (UBI) for non-compliance with certain provisions of its directions relating to fraud classification and reporting and sale of stressed assets.
According to a statement issued by the RBI on November 25, it has imposed a monetary penalty of Rs 1 Crore on Union Bank of India (the bank), for non-compliance with the certain provisions of directions issued by RBI contained in "Reserve Bank of India (Fraud - Classification and Reporting by commercial banks and select FIs) Directions 2016" and "Guidelines on Sale of Stressed Assets by Banks".
Also Read |
World Bank: GDP growth to touch 7.3 percent in 2018-19
This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949 (the Act). "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 statement said.
The central bank, in the statement, said that its inspection of UBI revealed, inter alia, non-compliance with the above-mentioned directions to the extent of (i) failure to classify an account as a Red Flag Account despite the presence of Early Warning Signals and (ii) failure to disclose ageing of and provisioning for Security Receipts (SRs) in its annual report.
Also Read |
RBI sets up panel to review cyber threats
RBI had conducted Statutory Inspection for Supervisory Evaluation (ISE) of UBI with reference to its financial position as on March 31, 2019 (ISE 2019). It examined the Risk Assessment Report, Inspection Report and all the related correspondences pertaining to ISE 2019. Following the revelations in ISE, RBI issued a notice 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, as stated therein. (ANI)