MUMBAI: Three state-run banks — Union Bank of India, Bank of India and Bank of Maharashtra — were on Friday fined a total of Rs 3 crore each by the Reserve Bank of India (RBI) for failing to timely detect and report fraud in some accounts.
The central bank, in three separate releases, said it has imposed Rs 1 crore each on the three banks.
The RBI on August 30 “imposed a monetary penalty of Rs 10 million” on the banks for contravention of the instructions contained in ‘Master Circular on Fraud — Classification and Reporting’ issued by it, the releases said.
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 (UBI) 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...”.
Meanwhile, Bank of India stated in its exchange filing that the penalty imposed on the bank is to be paid within 14 days of receipt of the order.