October 2022 digital edition

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licence was revoked eight days later for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