Urban cooperative banks' business size may be capped at Rs 20,000 cr

R Gandhi and Y H Malegam report to be the bedrock of new guidelines

The new regulatory framework for urban co-operative banks (UCBs) is expected to stipulate a threshold business size of Rs 20,000 crore, beyond which it will not be life as usual for these entities. Curbs are also expected to be placed on UCBs on some of their specific activities (especially on sensitive sectors like realty), so as to restrain their growth, given the less-than-adequate oversight of them.

The Reserve Bank of India (RBI) and the Ministry of Finance are in discussions on the regulatory and business topography of UCBs after the blowout at the Punjab and Maharashtra Co-operative Bank. “The R Gandhi