RBI Press Release: Monetary Penalty on UCO Bank (February 2026)

  

Feb 21, 2026

On February 20, 2026, the Reserve Bank of India (RBI) issued a press release announcing a monetary penalty of ₹38.60 lakh on UCO Bank for non-compliance with certain regulatory directions.

(Official website: https://www.rbi.org.in)

The action was taken under the Banking Regulation Act, 1949 and the Credit Information Companies (Regulation) Act, 2005, following the Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted with reference to the bank’s financial position as on March 31, 2025.

 

As per the press release, the following observations were sustained:

1. Savings Bank Interest Payment

The bank did not pay interest on certain savings bank deposit accounts.

RBI directions require periodic payment of interest on savings deposits. Savings accounts remain one of the most widely used banking products across customer segments. Accurate and timely credit of interest is a standard compliance expectation within the regulated banking framework.

(Reference: https://www.rbi.org.in → Notifications → Savings Deposit guidelines)

2. Reporting of SHG Member-Level Credit Data

The bank did not report certain credit-related Self Help Group (SHG) member-level data to Credit Information Companies (CICs).

Reporting to CICs supports the integrity of the credit information system and enables development of formal credit histories. SHG-linked lending forms an important component of financial inclusion initiatives in India.

(About credit reporting framework: https://www.rbi.org.in)

3. Refund of Proportionate Locker Rent

The bank did not refund the proportionate amount of advance locker rent collected in certain cases of premature surrender of lockers.

RBI’s directions on locker management require proportionate adjustment of advance rent in such cases. Locker services operate within defined regulatory standards intended to ensure transparent customer treatment.

(Reference: RBI Master Directions on Safe Deposit Lockers – https://www.rbi.org.in)

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The RBI clarified that the monetary penalty is based on deficiencies in regulatory compliance. It does not invalidate any transaction or agreement entered into by the bank with its customers. The imposition of penalty is also without prejudice to any other action that may be initiated by RBI.

Monetary penalties form part of the supervisory and corrective framework within India’s banking system. Such actions reflect ongoing regulatory oversight and compliance monitoring.

For access to official releases, readers may visit:
https://www.rbi.org.in → Press Releases

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About UCO Bank

UCO Bank (formerly United Commercial Bank) is one of India’s established public sector banks, founded in 1943 and headquartered in Kolkata. With a wide network of branches across urban, semi-urban, and rural India, the bank plays a significant role in financial inclusion, MSME lending, agricultural finance, and government-linked banking initiatives. 

Over the decades, it has contributed to expanding access to savings accounts, credit facilities, and priority sector lending, particularly for economically vulnerable sections.

Regulatory Documentation Note — For archival and public reference.

Nayakanti Prashant
Citizen Advocate — Digital Transaction Day (April 11)
The Joy of Digital Transactions

Official RBI Press Release https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62264