October 2022 digital edition
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INDIA<br />
RBI revokes licences of two co-op banks as 15 more are fined<br />
Deccan Urban Co-operative Bank and<br />
Rupee Co-operative Bank had their<br />
licences revoked by the Reserve Bank of<br />
India (RBI) in August. RBI also issued fines<br />
to 15 urban co-operative banks (UCBs).<br />
RBI released a statement cancelling<br />
Rupee Co-operative Bank’s licence on<br />
10 August, on the grounds that it “does<br />
not have adequate capital and earning<br />
prospects”, meaning they would be<br />
unable to pay present depositors in full.<br />
RBI described the continuance of the<br />
bank as “prejudicial to the interests of its<br />
depositors”, and not in the public interest.<br />
Rupee Co-operative Bank ceased trading<br />
on 22 September.<br />
Deccan Urban Co-operative Bank’s<br />
licence was revoked eight days later for<br />
the same reasons, and has ceased trading.<br />
RBI also issued fines of Rs 10.00<br />
lakh (£10,832) each to: Bharat Heavy<br />
Electricals Employees’ Co-operative Bank<br />
for not adhering to directions regarding<br />
exposure norms or other restrictions;<br />
Darussalam Co-operative Urban Bank for<br />
the violation of directions issued under<br />
income recognition, asset classification,<br />
provisioning and other UCB related matters,<br />
as well directions regarding its board of<br />
directors; Nellore Co-operative Urban<br />
Bank for issuing loans to directors or their<br />
p RBI has an enforcer role<br />
relatives and firms and violating directions<br />
regarding exposure norms; and Kakinada<br />
Co-operative Town Bank for not adhering<br />
to directions regarding the establishment<br />
of a depositor education and awareness<br />
fund, as well as violating directions<br />
issued under income recognition, asset<br />
classification, provisioning and other UCB<br />
related matters.<br />
National Urban Co-operative Bank<br />
was fined Rs 5.00 lakh (£5,416) for noncompliance<br />
with RBI’s directions on<br />
income recognition, asset classification,<br />
provisioning and other related matters for<br />
UCBs, as was The Ottapalam Co-operative<br />
Urban Bank for contravening the same<br />
directions as well as the Know Your<br />
Customer (KYC) guidelines for urban coop<br />
banks. KYC guidelines are in place to<br />
prevent money laundering.<br />
Kendrapara Urban Cooperative Bank<br />
received a Rs 1.00 lakh (£1,083) fine for<br />
also contravening the KYC directions.<br />
Visakhapatnam Co-operative Bank was<br />
fined Rs 55.00 lakh (£59,552) for violation of<br />
directions relating to income recognition,<br />
asset classification, provisioning and<br />
other related matters, as well as finance<br />
for housing schemes.<br />
These penalties come after seven other<br />
co-ops received monetary fines earlier in<br />
August for a range of direction violations.<br />
Thodupuzha Urban Co-operative Bank<br />
has had restrictions placed on its activity<br />
for a six month period from 23 August, due<br />
to its liquidity position.<br />
Customers are no longer able to<br />
withdraw funds from the bank, and<br />
Thodupuzha is prohibited from accepting<br />
new deposits, granting or renewing loans<br />
or making any new investments without<br />
prior approval from RBI. A further four<br />
UCBs have had existing restriction periods<br />
extended.<br />
This kind of action from RBI has become<br />
a regular occurrence for India’s co-op<br />
banking sector in recent years. In 2020,<br />
UCBs were brought under the supervision<br />
of the RBI, giving it the power to audit coop<br />
banks as well to approve mergers and<br />
the appointment of CEOs.<br />
SINGAPORE<br />
FairPrice Group to implement Progressive Wage Model<br />
NTUC FairPrice Group is implementing<br />
a wage structure to help increase the<br />
salaries of workers through upgrading<br />
skills and improving productivity.<br />
The retailer is following the Progressive<br />
Wage Model (PWM), which was developed<br />
by a committee of unions, employers and<br />
the Singaporean government.<br />
The initiative will cost the group S$70m<br />
(£43m) over a three-year period. FairPrice<br />
says the measure will increase the wages<br />
of non-executive staff, who make up 75%<br />
of its total workforce, to a level in line with<br />
their roles for their respective industries.<br />
CEO Vipul Chawla said: “Our staff<br />
are our most important asset and we<br />
value their dedication and service. We<br />
want to move forward as one team and<br />
are therefore going the extra mile and<br />
extending the initiative beyond our retail<br />
business to include employees across all<br />
our various businesses in FPG.<br />
“While companies have six months to<br />
work on the implementation of PWM, we<br />
expedited and implemented it right from<br />
the get-go, despite rising cost pressures<br />
and inflation, as we believe that a<br />
motivated and empowered workforce will<br />
deliver the best care for our customers.”<br />
The implementation began on 1<br />
September and will benefit 10,000 nonexecutive<br />
staff including full-time and<br />
part-time employees, regardless of<br />
nationality.<br />
The group consulted with the Food,<br />
Drinks and Allied Workers’ Union<br />
(FDAWU) ahead of the rollout.<br />
“It was indeed a pleasure working with<br />
FPG to roll out the PWM for the benefit of<br />
employees in FPG’s retail, food services<br />
and supply chain operations. We look<br />
forward to our continued partnership to<br />
do well, do good and do together for our<br />
workers,” said Tan Hock Soon, general<br />
secretary, FDAWU.<br />
18 | OCTOBER <strong>2022</strong>