The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 95.40 lakh on Union Bank of India for non-compliance with regulatory guidelines related to customer protection and asset classification.
The penalty, issued through an order dated March 23, 2026, pertains to violations of RBI directions on limiting customer liability in unauthorised electronic banking transactions and the automation of income recognition and asset classification processes.
The action follows a statutory inspection conducted by the RBI based on the bank’s financial position as of March 31, 2025. After reviewing the bank’s responses and submissions, the RBI identified several lapses, including failure to credit affected customer accounts within the stipulated timeframe, lack of round-the-clock reporting channels for unauthorised transactions, and manual intervention in system-based asset classification in certain accounts.
The RBI clarified that the penalty is based on regulatory deficiencies and does not question the validity of any transactions or agreements entered into by the bank. It also noted that the action is without prejudice to any further measures that may be taken against the bank.