The Reserve Bank today constituted a high-powered panel to re-examine and recommend appropriate set of businesses, size, conversion and licensing terms for the urban cooperative banking sector.
The committee under the chairmanship of RBI Deputy Governor R Gandhi has been set up on the recommendation made by the Standing Advisory Committee (SAC) on UCBs last year.
SAC is an advisory body convened by the Reserve Bank of India periodically. It is chaired by DG-in-charge of the Department of Cooperative Bank Regulation (DCBR) and has representatives from the sector, Registrars of Co-operative Societies of select States and IBA as its members.
Eight-member high level committee will look into what lines of business (that commercial banks undertake) can be permitted for UCBs and what should be the benchmark in terms of size of business, capital requirement, regulatory regime among others.
Besides, it would also examine what should be the appropriate size up to which a UCB may be able to grow without undue risk to the system, under the current regulatory framework in view of the limited legal powers and resolution options.
According to the RBI statement, the panel will also examine whether the time is opportune to give license to new UCBs as per the recommendations of the Expert Committee on licensing of New UCBs, (Malegam Committee).
If so the modalities of taking forward the recommendations of Malegam Committee, it said.
The committee will submit its report within three months from the date of its first meeting.
