UCBs need to address weak governance, slow tech adoption, says RBI report

The sector faces increasing competition from not only scheduled commercial banks (SCBs) but also from small finance banks and payments banks.

The Reserve Bank of India (RBI) has said urban cooperative banks (UCBs) need to break out of drags like  a low capital base, weak corporate governance, inability to prevent fraud and inadequate systems of checks and balances.

Recently, the unearthing of irregularities at Punjab Maharashtra Coop Bank has brought to the forefront issues relating to capital adequacy, governance and slow adoption 

of new technology.

The highest priority needs to be assigned to the establishment of a uniform regulatory and supervisory structure and an umbrella organisation in the architecture. This entity will provide liquidity and capital support, and galvanise the spread of