The Reserve Bank of India has imposed a
Rs 1 crore penalty on Union Bank of India for failing to
detect and report fraud on time.
The central bank
also imposed the same penalty on Bank of India and Bank of Maharashtra."This is to
inform that Reserve Bank has imposed a penalty of Rs 10 million on the bank for
delay in detection and reporting of fraud. The penalty has been imposed in
exercise of powers vested in RBI under Banking Regulation Act," Union Bank
of India said in a regulatory filing on Friday.
RBI had issued a
show cause notice to the bank on January 15, 2018 asking why a penalty not be
imposed on Union Bank of India under the Act. Subsequently, the bank
had replied to the regulator on February 1, followed by representations on oral
submission during personal hearing on April 14 before the Committee of
Executive Directors of the RBI.
"The reply as
well as oral submission made by the bank in the personal hearings and also
additional documents furnished have not been found adequate by RBI leading to
imposition of penalty of Rs 10 million," UBI said.However, the bank said
that the amount of the penalty is not material considering the size of the
bank. The bank further said it received communication from RBI on imposition on
penalty on September 6.
The
bank has taken necessary preventive measures and has implemented a
comprehensive corrective action plan to strengthen internal controls and to
ensure that such incidents do not recur, it added.
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