Case Brief
What Happened
RBI, by order dated May 23, 2025, imposed a monetary penalty of ₹63.60 lakh on Union Bank of India. The penalty was levied after supervisory inspections and a show-cause process found non-compliance with Section 26A of the Banking Regulation Act, 1949 and RBI directions on 'Credit Flow to Agriculture - Collateral free Agricultural Loans'. RBI sustained charges that the bank had not transferred eligible amounts to the Depositor Education and Awareness Fund within the prescribed period and had obtained collateral security for agricultural loans in some cases. RBI clarified that the penalty does not pronounce on the validity of any customer transaction or agreement and is without prejudice to any other action that may be initiated.