Reetu | Aug 31, 2024 |
RBI imposes Rs.2.68 Lakh Monetary Penalty on UCO Bank for Violations of Rules
The Reserve Bank of India (RBI) has imposed a Monetary Penalty of Rs.2.68 Lakh on UCO Bank for violations of RBI’s directions.
In a press release, RBI stated, “RBI has imposed a monetary penalty of Rs.2,68,30,000 on UCO Bank (the bank) for contravention of provisions of section 26A of the Banking Regulation Act, 1949 (BR Act), 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 FIs’, by an order dated August 26, 2024.”
This penalty has been imposed in the exercise of powers conferred on RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and section 51(1) of the BR Act.
RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank based on its financial situation as of March 31, 2022. Based on supervisory findings of BR Act violations/non-compliance with RBI directions and related correspondence, a notice was issued to the bank advising it to show cause why the maximum penalty should not be imposed on it for failing to comply with the provisions of the BR Act and RBI directions.
After evaluating the bank’s response to the notice, further submissions, and oral representations made during the personal hearing, the RBI-determined, among other things, that the following charges against the bank were supported and warranted the imposition of a monetary penalty.
The bank:
The action is based on shortcomings in statutory and regulatory compliance and is not intended to rule on the legality of any transaction or arrangement entered into by the bank with its clients. Furthermore, the issue of a monetary penalty does not preclude the RBI from taking any further action against the bank.
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