Reserve Bank of India (RBI), on Monday, said that it will impose a penalty of Rs 3 crore on Union Bank of India for not complying with know your customer (KYC) norms.
The regulator imposed penalties worth Rs 1 crore and Rs 2 crore on the state-owned lender, it said in two separate notifications.
In the first instance, RBI said it had received a complaint about some huge cash withdrawals from accounts maintained by Union Bank of India. The regulator sought an explanation from the bank on why it should not be penalised.
In the second instance, the regulator said that it penalised the public sector bank on account of media reports about a fraud at the bank and subsequent assessment of certain accounts which saw large transactions.
The banking regulator then issued a show-cause notice to Union Bank, seeking clarification.
After considering the bank's reply, oral submissions made in the personal hearing, as also the additional information and documents furnished, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.RBI Notification
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