AnyTime News 
Delay in Handling Unauthorized Transactions Raises Red Flags
Manual Interference in Automated Systems Sparks Compliance Concerns
Anytime News Network – Pooja Srivastava
. Public sector lender Union Bank of India has come under sharp regulatory scrutiny after Reserve Bank of India (RBI) imposed a monetary penalty of ₹95.40 lakh for serious deficiencies in compliance and customer protection mechanisms.
The penalty stems from RBI’s supervisory inspection based on the bank’s financial position as of March 31, 2025. One of the most critical lapses identified was the bank’s failure to credit (shadow reversal) the amount involved in unauthorized electronic transactions to customers’ accounts within the mandated 10 working days.
Additionally, the bank failed to provide customers with 24×7 access to report unauthorized transactions through multiple channels—an essential requirement in today’s digital banking ecosystem. This shortcoming raises serious concerns about the bank’s preparedness to handle fraud and protect customer interests.
Another alarming issue was the use of manual intervention in system-based asset classification for certain Kisan Credit Card (KCC) accounts. Such practices undermine transparency and increase the risk of manipulation within critical financial processes.
While RBI clarified that the penalty is limited to compliance deficiencies and does not question the validity of customer transactions, the incident highlights deeper concerns regarding governance, internal controls, and operational discipline within the bank.
Experts warn that lapses in customer protection and regulatory compliance can significantly erode trust in financial institutions, especially in an era where digital transactions dominate.
The key question now is whether Union Bank will implement robust corrective measures or continue to face recurring compliance failures.
