RBI imposes monetary penalty on UCO Bank

Case Brief

RBI imposed a monetary penalty on UCO Bank by order dated August 26, 2024. The penalty was based on supervisory findings from the bank's ISE 2022 inspection and related correspondence. RBI found that the bank had contravened section 26A of the Banking Regulation Act, 1949 and failed to comply with directions 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. The sustained lapses included not benchmarking certain floating-rate personal/retail and MSME loans to an external benchmark, opening certain current accounts of non-constituent borrowers with system exposure of ₹5 crore or more, opening savings deposit accounts in the name of ineligible entities, marking lien against certain NRE savings deposits, not transferring unclaimed fixed deposit balances to the Depositors Education and Awareness Fund within the required period, and not reporting certain fraud cases to law enforcement agencies.