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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2,68,30,000 (Rupees Two crore sixty-eight lakh and thirty thousand only) on UCO Bank for violations of the Banking Regulation Act, 1949 and non-compliance with RBI directions on various aspects of banking operations.
The penalty follows the findings of the Statutory Inspection for Supervisory Evaluation (ISE 2022) conducted with reference to the bank’s financial position as of March 31, 2022. Based on supervisory scrutiny and related correspondence, RBI issued a notice to the bank seeking explanation for the observed lapses.
After reviewing the bank’s submissions and conducting a personal hearing, RBI found that UCO Bank had:
Failed to benchmark floating rate personal/retail loans and MSME loans to an external benchmark.
Opened certain current accounts of non-constituent borrowers with exposure of ₹5 crore or more to the banking system.
Opened certain savings accounts in the name of ineligible entities.
Marked liens against certain NRE savings deposits.
Failed to transfer unclaimed balances of fixed deposits older than ten years to the Depositors Education and Awareness Fund within the stipulated period.
Failed to report certain cases of fraud to law enforcement agencies.
The RBI emphasized that the penalty is based on deficiencies in regulatory compliance and does not question the validity of any transactions entered into by the bank with its customers. It also clarified that the imposition of the penalty is without prejudice to any further action that may be taken against the bank.
[RBI]