RBI imposes hefty fine on RBL Bank, Union Bank of India, Bajaj Finance for non-compliance of guidelines | Mint
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Business News/ Industry / Banking/  RBI imposes hefty fine on RBL Bank, Union Bank of India, Bajaj Finance for non-compliance of guidelines
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RBI imposes hefty fine on RBL Bank, Union Bank of India, Bajaj Finance for non-compliance of guidelines

RBI, on Friday, imposed hefty fine on RBL Bank, Union Bank of India and Bajaj Finance. Check details

Reserve Bank of India RBI building,sansad marg;17/09/2012;photo:pradeep gaur/mintPremium
Reserve Bank of India RBI building,sansad marg;17/09/2012;photo:pradeep gaur/mint

RBI, on Friday, imposed hefty fine on RBL Bank, Union Bank of India and Bajaj Finance for non-compliance of guidelines.

The Reserve Bank of India imposed a penalty of 64 Lakh on RBL Bank Limited, 1 Crore on Union Bank of India and 8.50 Lakh on Bajaj Finance Limited. These fines were imposed on these firms for their non-compliance of RBI guidelines. 

The 1 crore penalty was imposed on Union Bank of India for  its non-compliance with certain directions. The RBI press release also underlined that the bank had sanctioned a term loan to a corporation in lieu of or to substitute budgetary resources allocated for certain projects. The amount was sanctioned even without evaluation the viability and bankability of the projects. According to the RBI press release, UBI failed to evaluate the viability of these projects to ensure that revenue streams from the projects rom the projects were sufficient to take care of the debt servicing obligations. 

In case of RBL bank, it was fined after the bank failed to obtain the annual declaration in Form B from one of its major shareholders. The bank had failed to get the declaration within one month of the close of the three financial years, ie FY 19, FY20, and FY21. The bank was also unable to furnish certificates to RBI regarding continuance of the 'fit and proper’ status of one of its major shareholders, by the end of September of the said three financial years, release added.

"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," RBI said in a release.

The Bajaj Finance Limited was fined with 8.50 lakh after the RBI found deficiencies in regulatory compliance. The action was based on the deficiencies in regulatory compliance. The company failed to comply with the RBI directions to the extent of not reporting and delay in reporting of certain frauds to RBI. 

The fine on the fintech firm was issued after considering its reply on matter and oral submissions made during personal hearings.

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Published: 13 Oct 2023, 05:54 PM IST
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