RBI Imposes Rs 95.40 Lakh Penalty on Union Bank of India for Regulatory Violations:

RBI Imposes Rs 95.40 Lakh Penalty on Union Bank of India for Regulatory Violations The Reserve Bank of India (RBI) recently imposed a monetary penalty worth Rs 95.40 lakh on the Union Bank of India dated March 23, 2026. The penalty was imposed due to the bank’s failure to comply with RBI rules on "Limiting Liability of Customers in Unauthorised Electronic Banking Transactions", and the "Automation of Income Recognition, Asset Classification and Provisioning (IRACP) processes". The levy of penalty is followed by a statutory inspection for supervisory evaluation conducted with reference to its financial position as of March 31, 2025.

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After reviewing the bank's written reply, the RBI concluded that the charges were valid and warranted a financial penalty. According to the RBI, the bank failed to credit the amount involved in certain unauthorised electronic transactions to customers' accounts within 10 working days of being notified, as required under the rules. The bank also did not provide customers with 24x7 access to report unauthorised banking transactions through multiple channels.

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The bank was found to have manually interfered with the system-based asset classification process in certain KCC accounts. The RBI clarified that the action has been taken due to deficiencies, and it does not question the validity of any transactions or agreements entered into by the bank with its customers.