RBI imposes ₹63.6 lakh penalty on Union Bank of India for compliance lapses
Published on 23/05/2025 05:46 PM
RBI imposes ₹63.6 lakh penalty on Union Bank of India for compliance lapsesThe Reserve Bank of India has imposed a ₹63.6 lakh penalty on Union Bank of India for delays in fund transfers and collateral breaches in farm loans, citing supervisory findings from ISE 2023-24.By Sheersh Kapoor May 23, 2025, 5:46:33 PM IST (Published)2 Min ReadThe Reserve Bank of India (RBI) has imposed a monetary penalty of ₹63.60 lakh on Union Bank of India for non-compliance with regulatory provisions related to depositor fund transfers and agricultural lending norms.
In an order dated May 23, 2025, RBI said the penalty was imposed for violations of Section 26A of the Banking Regulation Act, 1949, and its directions on ‘Credit Flow to Agriculture – Collateral free Agricultural Loans’.
The action follows supervisory findings from Statutory Inspections for Supervisory Evaluation (ISE) for the financial years ended March 2023 and March 2024.
RBI found that the bank had not transferred eligible amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed timeframe and had taken collateral security for agricultural loans below the ₹1.6 lakh threshold in certain cases—both clear violations of regulatory directions.
While the central bank acknowledged the bank’s responses, written and oral, it concluded that the breaches warranted monetary penalty. RBI clarified that the penalty is purely for regulatory non-compliance and does not question the validity of customer transactions.
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This follows a ₹1.66 lakh penalty imposed on the lender just last week over issues related to soiled note remittance and ATM cash-out discrepancies.
Shares of Union Bank of India closed marginally higher at ₹140.40 on the BSE ahead of the announcement.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsRBIReserve Bank of India (RBI)share market todayUnion Bank of IndiaUnion Bank of India shares