The Reserve Bank of India (RBI) has taken action against UCO Bank for non-compliance with banking regulations. A monetary penalty The Reserve Bank of India (RBI) has fine UCO Bank ₹2.68 crore for violating banking regulations. The penalty was imposed on August 26, 2024, for non-compliance with section 26A of the Banking Regulation Act, 1949, and certain RBI directions on interest rates, current account opening, and fraud reporting. The RBI used its powers under sections 47A(1)(c), 46(4)(i), and 51(1) of the BR Act to impose the fine on UCO bank.
- Benchmarking Failure: The bank did not benchmark floating rate personal/retail loans and loans to MSMEs to an external benchmark.
- Non-Constituent Accounts: We opened current accounts for borrowers who were not our constituents, and their exposures exceeded ₹5 crore.
- Ineligible Savings Accounts: We opened savings deposit accounts in the names of entities. Those entities were not eligible to have such accounts.
- Lien on NRE savings deposits: We placed a lien on certain NRE savings deposits.
- Unclaimed deposits: We did not transfer unclaimed fixed deposits exceeding ten years to the Depositors Education and Awareness Fund within the required time.
- Fraud reporting: We failed to report certain fraud cases to law enforcement agencies.
The RBI’s action is based on deficiencies in the bank’s statutory and regulatory compliance. It is not a judgment on the validity of any transactions or agreements between the bank and its customers.
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