The Banking regulator, Reserve Bank of India (RBI), has taken a significant action against the public sector bank, UCO Bank, by imposing a hefty fine of Rs. 2,68,30,000 for non-compliance with the Banking Regulation Act, 1949. The RBI issued a press release on August 26, 2024, detailing the penalties imposed on UCO Bank. According to the RBI, the fine was levied due to violations of Section 26A of the Banking Regulation Act 1949, which includes issues related to interest rates on advances, discipline in bank current accounts, interest rates on deposits, fraud, and reporting by commercial banks.
Following a supervisory inquiry, the RBI sent a notice to UCO Bank questioning the reasons why maximum penalties should not be imposed. Subsequently, after the bank’s response, the monetary penalty was enforced. The RBI highlighted that UCO Bank had failed to benchmark its floating rate personal retail loans and loans to MSMEs against external benchmarks, leading to the imposition of the fine. However, the RBI assured that this penalty would not adversely affect other measures taken against the bank.
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