The Reserve Bank of India (RBI) has levied penalties on Union Bank of India, RBL Bank and Bajaj Finance for non-compliance of regulatory norms.

In a statement, the RBI Friday said Rs 1 crore penalty has been imposed on state-run Union Bank of India on loan-related issues.

In a routine inspection conducted recently to examine Union Bank of India’s financial position as of 31 March 2021, the RBI found out that the state-run lender had failed to adhere to the regulator’s guidelines on the sanctioning of a term loan to a corporation. The bank had authorised this loan in lieu of or to substitute budgetary resources allocated for certain projects. 

Further, the bank did not conduct due diligence to evaluate the viability and bankability of these projects to ensure that their revenue streams would be sufficient to take care of the debt servicing obligations. 

A penalty of Rs 64 lakh has been imposed on private sector lender RBL Bank for non-compliance with certain directions of the RBI. The bank failed to obtain the annual declaration in Form B from one of its major shareholders, within one month of the close of the three financial years, ie FY 19, FY20 and FY21. It was also unable to furnish certificates to RBI regarding continuance of the 'fit and proper’ status of one of its major shareholders, by the end of September of the said three financial years.

In another release, the RBI said it levied a fine of Rs 8.5 lakh on Bajaj Finance for failure to comply with the regulatory directives regarding the extent of not reporting and delay in reporting of certain frauds to the central bank. 

In all cases, the RBI said penalties were based on the deficiencies in regulatory compliance and is ‘not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their respective customers’.

Meanwhile, the central bank also said it has approved the scheme of amalgamation of The Suvikas People's Co-operative Bank, Ahmedabad, with The Kalupur Commercial Co-operative Bank, Ahmedabad.

The scheme will come into force from 16 October.

The branches of The Suvikas People’s Co-operative Bank will function as branches of Kalupur Commercial Co-operative Bank from 16 October.