Urban Cooperative Banks

PCA will replace the existing SAF from the beginning of the new financial year - Apr 2025. During FY24, 122 UCBs across the country came out of SAF. The number of UCBs stood at 1,470 at end of Mar '25

Shaktikanta Das stated that to provide more flexibility, avenues for UCBs to raise capital, a discussion paper on capital-raising avenues will be issued for feedback from stakeholders

Gives one time permission to transfer corpus to reserves

The new framework will be applicable to UCBs with deposits above Rs 100 crore

The RBI on Friday issued a prompt corrective action framework for urban cooperative banks with an aim to enabling supervisory intervention at an appropriate time. The provisions of the Prompt Corrective Action (PCA) Framework for Primary (Urban) Co-operative Banks (UCBs) will be effective from April 1, 2025. The objective of the PCA Framework is to enable supervisory intervention at an appropriate time and require the UCBs to initiate and implement remedial measures in a timely manner, to restore their financial health. The Reserve Bank had issued a Supervisory Action Framework (SAF) as an early intervention tool for bringing about desired improvements in weak UCBs and UCBs which are experiencing financial stress. The SAF was last revised in January 2020. "This PCA framework shall replace the SAF," the RBI said in a statement. The revised framework seeks to provide flexibility to design entity specific supervisory action plans based on the assessment of risks on a case-by-case ...

UCB executives said besides regulatory push for effective asset quality management, the upturn in credit growth and improvement in margins have helped enhance provision cover

Lenders that hold more than Rs 5 trillion in deposits are weaker after the pandemic

A majority of the advances of UCBs was given to MSMEs, amounting to Rs 1.3 trillion in FY23

With the repricing of loans and higher lending rates for fresh loans, the net interest margins improved from a low of 1.89 per cent in Fy20

Flags internal auditor's task for early detection of irregularities

Cooperation Minister Amit Shah on Saturday launched the National Urban Cooperative Finance and Development Corporation (NUCFDC) and asked the umbrella body to set up one urban cooperative bank in each town. NUCFDC has received the RBI approval to function as a non-banking finance company and a self-regulatory organisation for the urban cooperative banking sector. After the launch, Shah said, "After 20 years, NUCFDC has been established. This is the need of the hour. I am happy the RBI has given approval for this." Urban cooperative banks have been operating in India for a long time, but could not grow rapidly even though they can play a key role in the country's economic growth, he said. The main objective of NUCFDC should be to help urban cooperative banks adhere to the Banking Regulations Act and bring professionalism in their work, the minister said. There are more than 1,500 urban cooperative banks with 11,000 branches and a deposit of Rs 5 lakh crore across the country, he ..

He added that it is essential for the director to understand the bank's financial statements as it is important for laying down underwriting standards and assessing credit proposals

The RBI on Friday announced the increase in the monetary ceiling of gold loans that can be granted under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh for UCBs

RBI Governor Shaktikanta Das on Monday said the central bank is "not comfortable" with the gross non-performing assets ratio of 8.7 per cent in urban cooperative banks (UCBs) and asked them to work towards improving the same. Addressing directors of UCBs in the financial capital at an RBI-organised conference, Das urged that such lenders should improve the governance standards, avoid related-party transactions and focus on credit risks, among others. It can be noted that the UCB sector has been fraught with multiple challenges and also witnessed difficult times in the recent past, like the implosion of the city-headquartered Punjab and Maharashtra Bank. Das reminded the directors of the UCBs that banks run on depositors and added that protection of the hard-earned money pooled in from the middle class, poor and retirees is far more sacred than going to a temple or a gurdwara. While the overall picture at an aggregate level looks nice, the situation on GNPAs and capital adequacy is

Aiming to strengthen 1,514 urban co-operative banks, the Centre on Friday said the Reserve Bank has notified four key measures, including giving them two years more to meet the priority sector lending targets. The Ministry of Cooperation in a statement said that four important initiatives have been taken to strengthen 1,514 Urban Co-operative Banks (UCBs) in the country. "Pursuant to detailed discussions held by Union Home Minister and Minister of Cooperation Amit Shah, with Finance Minister Nirmala Sitharaman and Governor, Reserve Bank of India (RBI), the RBI has notified these vital measures to strengthen Urban Co-operative Banks," it said. The ministry has listed the four measures notified by the RBI. In order to expand their business, UCBs can now open new branches up to 10 per cent (maximum 5 branches) of the number of branches in the previous financial year without prior approval of RBI in their approved area of operation. UCBs have to get the policy approved by their board

Strategy forms part of lender's aim to expand its network to 200 branches

Have also asked for revision in norms for gold loan repayments

According to UCB executives, the RBI's move may put banks in a difficult position as only a few days are left to refigure the norms' enforcement

However, growth in deposits and advances took a knock as liabilities shrank on the back of high base in 2020-21, shows RBI Report on Trend and Progress of Banking in India

The boards of the banks have to examine the compliance with the FWSM criteria and pass necessary resolutions and inform RBI immediately