RBI imposes Rs 10 lakh penalty on Union Bank of India

The Reserve Bank of India (RBI) on Monday said it has imposed a penalty of Rs 10 lakh on Union Bank of India for non-compliance with the directions on cyber security framework. The penalty was imposed on July 9, 2019, according to an RBI release. “This action (imposition of penalty) is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” it added.

Giving background of the case, the RBI said that based on reports of generation of seven fraudulent messages of a total value of USD 171 million through SWIFT system of the bank in 2016, an examination of its cyber security framework was carried out which revealed several deficiencies.

Based on the findings, a notice was issued to the state-owned bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the extant directions. After considering the replies received from the bank, and submissions made during the personal hearing, the RBI decided to impose the penalty, the central bank said.