RBI imposes 26.8-mln-rupee penalty on UCO Bank for non-compliance
This story was originally published at 22:02 IST on 30 August 2024
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--RBI imposes 26.8-mln-rupee penalty on UCO Bank
MUMBAI – The Reserve Bank of India today imposed a monetary penalty of 26.83 mln rupees on UCO Bank and 0.21 mln rupees on Cent Bank Home Finance Ltd for non-compliance of certain regulatory provisions of the central bank, the RBI said in a press release today.
UCO Bank has been penalised for contravention of some provisions of the Banking Regulation Act, 1949, and non-compliance with certain directions issued by RBI on 'Interest Rate on Advances', 'Opening of Current Accounts by Banks - Need for Discipline', 'Interest Rate on Deposits' and 'Frauds classification and reporting by commercial banks and select Financial Institutions'.
A statutory inspection for supervisory evaluation of UCO bank was conducted by the RBI with reference to its financial position as on Mar 31, 2022. Based on supervisory findings of contravention of Banking Regulation Act and related correspondence in that regard, a show cause notice was issued to the bank.
The RBI has charged the bank with failure to benchmark floating rate for personal loans and loans to micro, small and medium enterprises to an external benchmark. UCO Bank also opened certain current accounts of non-constituent borrowers, whose exposure to the banking system was 50 mln rupees or more, and certain savings deposit accounts in the name of ineligible entities.
The charges also include the bank failing to transfer unclaimed balances in certain fixed deposits, which remained unclaimed for a period of more than 10 years, to Depositors Education and Awareness Fund, within a period of three months from the expiry of the said period of 10 years. The lender also failed to report certain cases of fraud to law enforcement agencies, the RBI said.
Cent Bank Home Finance was fined for non-compliance with certain provisions of the RBI's know-your-customer norms. The statutory inspection of the company was conducted by the National Housing Bank with reference to its financial position as on Mar 31, 2022. The company failed to carry out a periodic review of risk categorisation of accounts, with such periodicity being at least once in six months during 2021-22 (Apr-Mar), the RBI said.
On the National Stock Exchange, shares of UCO Bank closed flat at 51.02 rupees. End
Reported by Vidhushi RajPurohit
Edited by Ashish Shirke
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