RBI imposes Rs 1 crore penalty on UCO Bank

Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on UCO Bank for contravention of its instructions relating to opening of current account and providing bill discounting facilities to account holders without having any borrowing facility with the bank resulting in siphoning of funds.  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 and its customers.

The central bank had carried out an inspection of books of accounts, internal control, compliance system and processes at one of the UCO bank’s branches during May-June, 2015. On the basis of findings of this inspection a Show Cause Notice was issued to UCO Bank for violation of certain regulations and instructions.

UCO Bank is a commercial bank and a Government of India Undertaking. The bank offers wide range of services includes Personal Banking, Corporate Banking, International Banking, Rural Banking and other services.