The Reserve Bank of India (RBI) has imposed substantial fines on RBL Bank, Union Bank of India, and Bajaj Finance for non-compliance with regulatory guidelines. The penalties reflect the RBI’s commitment to enforcing these rules and ensuring that financial institutions adhere to the specified standards.
RBL Bank Limited has been fined ₹64 lakh due to non-compliance related to regulatory requirements. Specifically, the bank failed to obtain the annual declaration in Form B from one of its major shareholders within the stipulated timeframe. This lapse occurred over three consecutive financial years – FY 2019, FY 2020, and FY 2021. Additionally, the bank did not provide the required certificates to the RBI regarding the continued “fit and proper” status of the major shareholder by the end of September for the mentioned financial years.
Union Bank of India was penalized with a ₹1 crore fines for non-compliance with certain RBI directives. Notably, the bank sanctioned a term loan to a corporation in place of or to replace budgetary allocations for specific projects. These sanctions were made without evaluating the viability and bankability of the projects. The RBI’s press release emphasized that Union Bank of India failed to assess the projects’ viability to ensure that the revenue generated from these projects would be sufficient to meet debt servicing obligations.
The fine on Bajaj Finance Limited amounts to ₹8.50 lakh, and it stems from non-compliance with regulatory requirements. Specifically, the company failed to adhere to the RBI’s directives regarding the reporting and timely disclosure of certain frauds to the RBI. The fine was imposed following a thorough review, which included the company’s response and oral submissions made during personal hearings.
The RBI has made it clear that these penalties are related to shortcomings in regulatory compliance and do not pass judgment on the validity of any transactions or agreements between the banks and their customers. These actions serve to underscore the RBI’s commitment to maintaining the integrity of the financial sector by enforcing regulatory standards and fostering compliance. Financial institutions are expected to operate in strict adherence to these guidelines to ensure stability and transparency within the industry.