Reserve Bank of India (RBI) has fined Union Bank of India ₹1 crore for non-compliance with the certain provisions of directions issued by the Central bank related to fraud classification and stressed assets.
RBI has conducted an inspection with reference to its financial position as of 2019, and found that the bank was in violation of the norms.
According to the Central Bank, Union Bank of India failed to classify an account as red flag account despite presence of early warning signals and also did not disclose ageing of and provisioning for security receipts in its annual report.
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.
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 was substantiated and warranted imposition of monetary penalty on the bank, RBI said in a statement.