The Reserve Bank of India has imposed a monetary penalty of Rs 15.00 lakh on The Utkal Cooperative Bank Ltd. The UCB was found guilty of contravention of/ non-compliance with the directions issued by Reserve Bank of India (RBI) on (i) Exposure Norms and Statutory/Other Restrictions-UCBs and (ii) specific directions issued under Supervisory Action Framework (SAF).
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, says RBI.
The inspection report of the bank based on its financial position as on March 31, 2021, revealed, inter alia, that the bank had breached (i) prudential inter-bank (gross) exposure norms and prudential inter-bank counter-party limit and (ii) violated specific directions issued under SAF, of not offering higher rate of interest on deposits than those offered by SBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s reply and additional submissions made by it, RBI came to the conclusion that the aforementioned charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.
