INSUBCONTINENT EXCLUSIVE:
of fraud management system, rating methodology and categorisation of priority sector loans among many others
The bank has filed initial papers to raise Rs 1,200 crore via an initial public offering (IPO) in August.
Under the condition for small
finance bank (SFB) licences issued by the Reserve Bank of India, SFBs will be required to list after three years of operation with a capital
Ujjivan will complete three years of operations on January 31, 2020.
It will use the funds to augment capital base and meet future
Ujjivan Financial Services raised Rs 300 crore in February from a clutch of investors, including HDFC Life and Sundaram MF, in a pre-IPO
The the company was valued at about Rs 2,000 crore at the time of the fund raising.
The RBI inspection was conducted between January and
February 2019, for financial year 2017-18
In the papers filed with the stock exchange, Ujjivan said that RBI pointed out lack of a system to tag priority sector advances, high
proportion of bulk deposits and concentration of deposits of our top 20 depositors.
It also observed that liability products were being
offered from certain centres without RBI approval
In its draft red herring prospectus, Ujjivan mentioned RBI has pointed out deficiencies in AML, KYC protocols and lack of an independent
compliance department.
The regulator noticed discriminatory interest rate on a particular date for deposit of the same tenor and same amount
Also, the rate of interest mentioned in certain sanction letters were different from those mentioned in the loan agreements
Ujjivan is non-optimising of core banking software customised for micro-loans.
AU Small Finance Bank had a successful listing last year
Failing to meet the norms, RBI froze the pay of CEO and barred the bank from opening new branches.
