Big action by RBI on UCO Bank: Banking regulator Reserve Bank of India (RBI) has imposed a fine of Rs 2,68,30,000 on public sector UCO Bank for non-compliance with the Banking Regulation Act 1949 and its directions.
According to RBI, this action has been taken against UCO Bank for violating the provisions of Section 26A of the Banking Regulation Act 1949, interest rates on advances, discipline in the current accounts of the bank, interest rates on deposits and non-compliance with the guidelines issued by RBI regarding fraud classification and reporting of commercial banks and selected financial institutions.
RBI said that it has taken this action under the powers given to it. RBI He said that after the supervisory investigation of the bank, a Show Cause Notice was also issued to it. The bank was sent a notice asking why the maximum penalty should not be imposed on it. After the bank’s reply to the notice, RBI found that action should be taken to impose a penalty, after which a monetary penalty was imposed on the bank.
According to RBI, UCO Bank has failed to benchmark floating rate personal retail loans and loans given to MSMEs with external benchmarks. Current accounts were opened in the name of such people whose exposure to the banking system was more than Rs 5 crore. Saving deposit accounts were opened in the name of such people who were not eligible.
Certain unclaimed fixed deposit balances remained unclaimed for more than 10 years after failing to transfer them to the Depositors Education and Awareness Fund within three months of the expiry period.
Also, the bank did not show interest in reporting the fraud cases to enforcement agencies. RBI said that imposing monetary penalty will not have any adverse effect on any other action initiated against the bank.
