India’s public sector lender Union Bank of India has come under scrutiny after allegations of irregularities in its financial reporting surfaced, triggering concern across the banking sector. A complaint submitted by a senior official to the Reserve Bank of India (RBI) points to unusual fluctuations in the bank’s CASA (Current Account Savings Account) balances at the close of financial year 2025–26 (FY26), raising suspicions of possible “window dressing.”
According to the complaint, the bank’s CASA balances witnessed a sharp surge of nearly ₹31,000 crore between March 28 and March 31—typically a period when banks finalize their year-end balance sheets. While some degree of adjustment is common during this time, the scale of the increase has raised serious questions. More notably, by April 2, the CASA balances reportedly dropped by around ₹12,000 crore, indicating a significant and rapid reversal.
Experts suggest that such patterns are often associated with “window dressing,” a practice where short-term funds are temporarily added at the end of a financial period to present a stronger financial position, only to be withdrawn soon after. The complaint argues that this kind of movement does not align with normal, organic deposit growth driven by customer activity.
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Unusual account activity and governance concerns
Further concerns have been raised over unusual activity in CASA accounts during the same period. The complaint alleges that a large number of accounts were opened and closed within a very short timeframe between March 30 and March 31. In some instances, thousands of accounts were reportedly opened and shut on the same day, intensifying suspicion that these accounts may have been used to route temporary funds rather than reflect genuine banking activity.
The complaint also highlights that the sharp rise and subsequent fall in CASA balances appear inconsistent with the bank’s usual growth trends. Typically, deposit growth is gradual and stable, but the abrupt spike followed by a steep decline has brought the bank’s reporting transparency into question.
Questions have also been raised about governance and oversight at the top management level. The complaint reportedly flags concerns regarding supervision at the level of the bank’s senior leadership. However, neither the bank nor the officials named have issued any formal response to these allegations so far.
Allegations beyond CASA and RBI focus
Beyond CASA figures, the complaint extends to treasury operations, alleging that certain structured transactions may have been carried out around the financial year-end to influence the bank’s balance sheet. It also flags potential irregularities in One-Time Settlement (OTS) proposals, vendor selection processes, and consultant appointments, hinting at broader governance concerns.
At present, these claims remain allegations contained in a complaint submitted to the RBI, and no regulatory authority has confirmed them. Typically, such matters involve a detailed review process, including scrutiny of internal records, transaction trails, and compliance procedures.
Sector‑wide implications and transparency debate
Banking experts believe that if proven, the case could have implications far beyond a single institution. It may trigger a wider debate on transparency, disclosure standards, and governance practices across the banking sector, particularly among public sector banks where accountability is closely tied to public trust.
Some analysts, however, note that short-term fluctuations around the financial year-end are not entirely uncommon. Yet, they caution that changes of this magnitude, coupled with a swift reversal, warrant regulatory attention and deeper examination.
All eyes are now on the RBI and its potential course of action. If a formal investigation is initiated, the case could emerge as a key test of banking governance, risk management, and financial reporting standards in India. For now, the episode underscores the increasing regulatory focus on transparency and accountability within financial institutions.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
