 "Reserve Bank of India, RBI")
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.
Also Read
UCBs have to get the policy approved by their board and comply with the Financially Sound and Well Managed (FSWM) Norms.
UCBs can also do One-Time Settlement at par with commercial banks.
The central bank has notified a framework governing this aspect for all regulated entities, including UCBs. Now co-operative banks through board-approved policies may provide process for technical write-off as well as settlement with borrowers.
The RBI has decided to extend the timeline for UCBs to achieve Priority Sector Lending (PSL) targets by two years i.e. up to March 31, 2026.
The deadline to achieve PSL target of 60 per cent, which was March 31, 2023, has also been extended to March 31, 2024. The excess deposits, if any, after clearing the shortfall of PSL during FY 2022-23 will also be refunded to the UCB.
Since UCBs work in urban areas, unlike commercial banks which have branches in rural areas as well, they were facing hardships on this score, the ministry said.
In order to meet the long pending demand of the cooperative sector for closer coordination and focused interaction, the RBI has recently notified a nodal officer as well.
These initiatives will further strengthen the UCBs.
"Under the leadership of Prime Minister Narendra Modi, the Ministry of Cooperation is committed to strengthen cooperatives and treat them at par with other forms of economic entities, both as beneficiaries and participants," it said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
