Union Bank of India , a prominent public sector bank, has been penalized by the Reserve Bank of India (RBI) for deficiencies observed in its Currency Verification and Processing System. The penalty, amounting to ₹1.05 lakh, was imposed on July 30, 2025, as per the bank's disclosure to the stock exchanges.

Penalty Details

The RBI levied the penalty on Union Bank of India for specific deficiencies in its currency handling processes. The bank received the order on July 30, 2025, and promptly disclosed this information to comply with regulatory requirements.

Impact and Bank's Response

In its communication to the stock exchanges, Union Bank of India stated:

• The penalty has no material impact on the bank's financial operations or other activities.
• The impact of the penalty is described as "not significant" by the bank.
• Union Bank has already implemented necessary preventive measures to avoid recurrences of such instances in the future.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This regulation mandates listed entities to inform the stock exchanges about any material events or information.

Conclusion

While the penalty highlights the importance of maintaining robust systems in currency verification and processing, Union Bank of India has assured its stakeholders that the incident does not significantly affect its operations. The bank's proactive approach in implementing preventive measures demonstrates its commitment to addressing regulatory concerns and maintaining operational efficiency.

Investors and stakeholders of Union Bank of India will likely monitor the bank's future compliance and operational updates closely.

Union Bank of India , one of India's leading public sector banks, has reported a 12% year-on-year growth in net profit for the first quarter, despite facing margin pressure due to recent interest rate cuts.

Key Financial Highlights

Credit Growth and Portfolio Mix

Union Bank of India demonstrated strong performance in its focus segments during the first quarter. The bank's overall credit growth of 6.80% was primarily driven by robust expansion in retail and MSME sectors. Retail loans saw an impressive growth of 26.00%, while MSME loans increased by 18.00%. The RAM segment, which includes Retail, Agriculture, and MSME loans, grew by 10.30%, underlining the bank's strategic focus on these areas.

Margin Pressure and Interest Rate Impact

The bank experienced some pressure on its Net Interest Margin (NIM), which declined by 11 basis points to 2.76%. This reduction was attributed to recent interest rate cuts, with 48% of the bank's loan portfolio linked to the External Benchmark Lending Rate (EBLR) experiencing immediate repricing. Despite this challenge, the bank managed to improve its Return on Assets (ROA) to 1.11% from 1.06% in the same quarter of the previous year.

Asset Quality and Provisions

Union Bank of India reported marginal improvements in its asset quality metrics:

• Gross Non-Performing Asset (NPA) and Net NPA ratios showed slight improvement
• Provision coverage ratio increased to 95.00%
• Credit cost decreased to 47 basis points
• Slippage ratio remained below 1%

These figures indicate the bank's continued efforts in managing asset quality and maintaining adequate provisioning.

Capital Adequacy and Liquidity

The bank maintained a strong capital position with a Capital Adequacy Ratio of 18.30%. In terms of liquidity management, Union Bank reduced its bulk deposits by 7.00% while maintaining a comfortable Credit-Deposit (CD) ratio of 76.00%.

Other Income and Future Outlook

Treasury income for the quarter stood at Rs. 1,418.00 crores, compared to Rs. 1,026.00 crores in the previous year's corresponding quarter. However, the bank noted the absence of Priority Sector Lending Certificate (PSLC) income this quarter due to regulatory changes affecting agricultural gold loans.

Looking ahead, the bank's management expects a 20-25 basis points moderation in NIM for the full year but aims to maintain ROA above 1%. They also anticipate some recovery in PSLC income in subsequent quarters.

Union Bank of India's first quarter results demonstrate its resilience in a challenging interest rate environment, with strong growth in focus segments offsetting margin pressures. The bank's strategic focus on retail and MSME lending, coupled with improved asset quality, positions it well for the remainder of the fiscal year.