RBI slaps monetary penalties on RBL Bank, Union Bank, and Bajaj Finance

Mumbai, Oct 13, 2023 

Union Bank of India has incurred a penalty of Rs 1 crore for its failure to comply with specific directions 

The Reserve Bank of India (RBI) said on Friday that it has imposed monetary penalties on RBL Bank, Union Bank, and Bajaj Finance due to violation of certain norms.

RBL Bank has been fined Rs 64,00,000 for its failure to obtain an annual declaration in Form B from one of its major shareholders within the stipulated time frame of one month after the close of the financial years ending on March 31, 2018, March 31, 2019, and March 31, 2020. The bank also neglected to provide certificates to RBI confirming the 'fit and proper' status of one of its major shareholders by the end of September in these respective financial years.

Further, Union Bank of India has incurred a penalty of Rs 1 crore for its failure to comply with specific directions. The bank had sanctioned a term loan to a corporation without conducting necessary due diligence on the viability and bankability of the projects. This non-compliance occurred as the bank did not ensure that the revenue generated from these projects was adequate to cover the debt servicing obligations. Additionally, the repayment and servicing of the loan were made from budgetary resources, contrary to the prescribed regulations.

A penalty worth Rs 8,50,000 was imposed on Bajaj Finance. The penalty was levied due to the company's non-compliance with the 'Monitoring of Frauds in NBFCs Directions, 2016,' a set of guidelines issued by the RBI.

[The Business Standard]