What changed
RBI issued a circular on January 15, 2013, mandating UCBs to take corrective actions based on CAG's performance audit of the Agricultural Debt Waiver and Debt Relief Scheme, 2008. The audit revealed ineligible beneficiaries, tampered records, excess/less benefits, and non-issuance of certificates. Banks must complete remedial measures within 15 days and report to RBI regional offices.
What it means for you
UCBs face immediate pressure to recover wrongly disbursed funds and tighten internal controls. The circular signals heightened regulatory scrutiny on scheme implementation, with potential FIRs for record tampering. Banks must prioritize audit compliance to avoid further RBI action.
What you must do
- Recover amounts from ineligible farmers and MFI-related disbursements within 15 days.
- Fix responsibility of bank officials and auditors for each irregularity, including lodging FIRs for tampered records.
- Issue pending Debt Waiver and Debt Relief Certificates by February 28, 2013.
- Monitor fresh loans extended to scheme beneficiaries and report outcomes to RBI regional office.
Who it affects
Primary (Urban) Co-operative Banks, Bank officials handling ADWDRS 2008 implementation, Auditors of UCBs
What is the deadline for completing the corrective actions?
All actions must be completed within 15 days from the circular's issue date (January 15, 2013), and reported to the concerned RBI regional office.
What happens if banks do not comply with these instructions?
The circular does not specify penalties, but non-compliance may lead to further regulatory action from RBI, given the Government of India's directive for immediate corrective measures.