City Union Bank: RBI Inspection Report Obtained under RTI Reveals Poor Management, High-Risk Loans

City Union Bank: RBI Inspection Report Obtained under RTI Reveals Poor Management, High-Risk Loans*

The report reveals poor management control and sanctioning of high-risk loans from senior officials to the top executives without following RBI guidelines.

In its inspection report for FY18-19, RBI says, "Several credit proposals (120 proposals in March 2019 amounting to Rs1,583 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). In few SMA-2 accounts (two out of a sample of five) upgraded (out of SMA) as on the date of present inspection (DPI). It was found that overdues were cleared through the sanction of fresh limits."