RBI Penalises RBL Bank, Union Bank Of India, Bajaj Finance For Non-compliance
The Reserve Bank of India imposed a penalty of Rs 64 Lakh on RBL Bank, Rs one crore on Union Bank of India and Rs 8.50 Lakh on Bajaj Finance. These fines were imposed on these firms for their non-compliance with RBI guidelines.
The Rs 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 evaluating 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 were sufficient to take care of the debt servicing obligations.
In the 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, i.e., FY19, FY20, and FY21. The bank was also unable to furnish certificates to RBI regarding the continuance of the 'fit and proper’ status of one of its major shareholders by the end of September of the said three financial years, the 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.
Bajaj Finance Ltd was fined with Rs 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 delaying the reporting of certain frauds to RBI. The fine on the fintech firm was issued after considering its reply on the matter and oral submissions made during personal hearings.
