RBI Levies Penalty of Rs 38.60 Lakh on UCO Bank Due to Regulatory Non-Compliance

The Reserve Bank of India (RBI) has imposed a penalty of Rs 38.60 lakh on UCO Bank for not following some regulatory directions issued by the RBI.

The action was taken under the powers given to RBI under section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949 and section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005.

As per the order, the bank allegedly failed to pay the interest on some Savings Bank Deposit accounts, and it did not even report credit data of Self Help Group (SHG) members to Credit Information Companies. Additionally, the bank also failed to refund the proportionate advance locker rent when customers surrendered lockers before the end of the rental period.

As per the RBI, the bank’s non-compliance was uncovered during the Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted by the RBI with reference to the bank’s financial position as of March 31, 2025. After reviewing the supervisory findings of the bank’s non-compliance with RBI guidelines, the RBI issued a show-cause notice to the bank asking why the penalty for the non-compliance should not be levied.

Based on the bank’s reply, the RBI found that the allegations against the bank were correct. RBI said this penalty is related to regulatory non-compliance and does not question the validity of any transactions between the bank and its customers. It also said that the levy of the penalty is without prejudice to any other action that may be taken by the RBI against the bank.