What changed
RBI observed that while UCBs have identified cases and amounts of undue benefits under ADWDRS 2008, the recovery process is slow and banks have not yet refunded the identified amounts to RBI. The circular reiterates the earlier directive from March 2013 and sets a firm deadline of December 20, 2013 for refunds, including both CAG-flagged and non-CAG cases.
What it means for you
UCBs face heightened regulatory pressure to recover and refund undue benefits disbursed under the 2008 debt waiver scheme. The personal responsibility of the institutional head is emphasized, meaning non-compliance could lead to supervisory action. Banks must prioritize recovery from ineligible borrowers and adjust accounts promptly to avoid losses to the exchequer.
What you must do
- Complete recovery of undue benefits from ineligible borrowers, excess benefits, and wrongful charges/interest under ADWDRS 2008.
- Refund the identified amounts to the concerned Regional Office of RBI by December 20, 2013.
- Adjust recovered amounts in books of account immediately upon recovery.
- Ensure the institutional head personally oversees and expedites the recovery and refund process.
Who it affects
All Primary (Urban) Co-operative Banks, Institutional heads of UCBs, Borrowers who received undue benefits under ADWDRS 2008
What is the deadline for refunding the identified amounts to RBI?
The deadline is December 20, 2013, for both CAG-flagged and non-CAG cases.
What categories of undue benefits are covered?
Benefits granted to ineligible borrowers, excess benefits extended to borrowers, and charges/interest claimed or debited wrongfully.
Who is personally responsible for ensuring full recovery?
The institutional head of each Urban Co-operative Bank is personally responsible for ensuring full recoveries and refunds to avoid loss to the exchequer.