RBI Fines Three State Banks

The Reserve Bank of India has imposed a monetary penalty of Rs 1 crore ($138,690) each on the Union Bank of India, Bank of India and Bank of Maharashtra for failing to detect and report fraud in certain accounts on time, PTI reported. The RBI, in three separate releases, said it has imposed a penalty of Rs 1 crore each on three state-run banks. According to its releases, the central bank on August 30 “imposed a monetary penalty of Rs 10 million” on the three banks for contravention of its instructions contained in Master Circular on Fraud—Classification and Reporting. 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, Union Bank of India said in a regulatory filing. The bank added that while the representatives of the bank made oral submissions during the personal hearing on April 4 this year before the Committee of Executive Directors of RBI, “The reply as well as the submissions… and additional documents furnished have not been found adequate by RBI…”.