HomeFinance NewsAll points mentioned by RBI satisfactorily addressed: City Union Bank on inspection report

All points mentioned by RBI satisfactorily addressed: City Union Bank on inspection report

RBI shared its inspection report of City Union Bank Ltd under the Right to Information (RTI) Act. The report showed poor management control and sanctioning of high-risk loans from senior officials to the top executives without following RBI guidelines.

Profile image

By CNBCTV18.com August 30, 2022, 8:33:26 AM IST (Updated)

3 Min Read
All points mentioned by RBI satisfactorily addressed: City Union Bank on inspection report



City Union Bank's N Kamakodi said that all the points mentioned in the Reserve Bank of India (RBI) report are satisfactorily addressed.


"All the points that RBI report talks about have been resolved. There’s not even a single outstanding point. Explanations have also been submitted to the central bank and the same has been accepted," Kamakodi said while talking to CNBC-TV18.

"If we sanctioned loans beyond norms, they would’ve been part of divergence.
There is no NPA that has come from gold loans," he added.



Earlier, RBI shared its inspection report of City Union Bank Ltd under the Right to Information (RTI) Act. The report showed poor management control and sanctioning of high-risk loans from senior officials to the top executives without following RBI guidelines.

"Several credit proposals (120 proposals in March 2019 amounting to Rs 1,583 crore) were sanctioned or ratified by the managing director and chief executive officer (MD&CEO) or senior officials just near year-end, enhancing oversight lapse risk. Few of these accounts involved sanction of new facilities to the irregular borrowers to avoid being tagged as a special mention account (SMA) or non-performing asset (NPA)," the central bank had said.



"It was observed that the Bank had financed a chit company for the purpose of depositing margin money with sub-registrar of chit for running a chit scheme. Few accounts were regularised near the balance sheet date by providing new facilities to the irregular borrowers, to avoid being tagged as SMA or NPA," the report said.

Also read | RBI cautions govt over big bang approach to PSU bank privatisation

During its inspection, the RBI team said that it also observed that City Union Bank has a separate loan product for pawnbrokers.

The RBI provided the report to activist Subhash Agrawal nearly eight months after he had sought it under the Right to Information (RTI) Act.

He said the RBI did not provide inspection reports of some other banks on the ground that the banks concerned had approached the Central Information Commission against the RBI notice issued to such banks under section 11 of the RTI Act, which seeks third party consent before making disclosure.

The Supreme Court on April 26, 2019 had made clear that the RBI was "duty bound to furnish all information relating to inspection reports and other material" under the RTI Act except those which pertained to "matters of national economic interest".
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!