The RBI has imposed a penalty of ₹1 crore on Union Bank of India for non-compliance with directions on ‘Loans and Advances – Statutory and Other Restrictions’.

Examination of the financials for FY21 revealed that the bank sanctioned a term loan to a corporation in lieu of or to substitute budgetary resources envisaged for certain projects, and without undertaking due diligence on the viability of the projects. Further, the repayment/servicing of the loan was made out of budgetary resources, the central bank said.

It also fined RBL Bank for an amount of ₹64 lakh for violation of norms on regulatory approval for acquisition of shares or voting rights in private sector banks. The lender failed to obtain the annual declaration in Form B from one of its major shareholders, within one month of the close of FY18, FY19 and FY20. It also did not furnish certificates to RBI regarding continuance of the ‘fit and proper’ status of one of its major shareholders, by the end of September, for all the three years.

Pune-based Bajaj Finance has also been levied a penalty of ₹8.50 lakh for breach of regulatory norms on the extent of not reporting and delay in reporting of certain frauds to RBI.