Union Bank of India declines as RBI slaps penalty of Rs 1.06 crore

Union Bank Of India is currently trading at Rs. 120.15, down by 1.40 points or 1.15% from its previous closing of Rs. 121.55 on the BSE.

The scrip opened at Rs. 122.35 and has touched a high and low of Rs. 122.35 and Rs. 119.80 respectively. So far 347896 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 172.45 on 03-Jun-2024 and a 52 week low of Rs. 84.85 on 01-Sep-2023.

Last one week high and low of the scrip stood at Rs. 125.40 and Rs. 119.80 respectively. The current market cap of the company is Rs. 91755.94 crore.

The promoters holding in the company stood at 74.76%, while Institutions and Non-Institutions held 18.75% and 6.50% respectively.

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1,06,40,000 on Union Bank of India for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures-Across Banks’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and section 51(1) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why maximum penalty should not be imposed on it for its failure to comply with the said directions.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty. The bank failed to (i) ensure data accuracy and integrity in CRILC reporting and (ii) carry out risk categorisation of certain customers.

The action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

Union Bank of India is one of the largest government-owned banks of India. The Bank offers products and services in three categories - Deposits, Loans and Advances, and Remittances & Collections.