The Reserve Bank of India has imposed Rs 3 crore penalty on Union Bank of India for “non-compliance” with the directions on know your customer (KYC) norms in two separate cases. While the RBI has imposed a penalty of Rs 2 crore in one case, it slapped a Rs 1 crore penalty in the second case. “Based on reports related to a fraud in a bank, it conducted an examination of certain accounts in Union Bank of India, which had substantial transactions. Upon examination of the documents obtained in this regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with directions issued by RBI,” the RBI stated.
The second case related to a complaint regarding “huge cash withdrawals in certain accounts”. Both the penalties were imposed on July 26. As per RBI, the penalties were imposed due to deficiencies in regulatory compliance and “not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers”. “After considering the bank’s reply, oral submissions made in the personal hearing, as also the additional information and documents furnished, the RBI came to the conclusion that the charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty,” the RBI said.