The Reserve Bank of India (RBI) has assured all efforts to beef up the urban co-operative banks (UCBs). Y V Reddy, governor, RBI said that RBI will play an enabling role to shore up viable UCBs and will draw out a mechanism for unviable UCBs to get consolidated. | |
| After kicking off the Task Force on UCBs in Bangalore on Saturday, Reddy said: "The UCB scene in Karnataka is healthy. Of the 296 such institutions in the state, 48 per cent (142 banks) of them are healthy and the remaining few can be constructively re-energised and the weaker ones has to take the consolidation route. It will be disruptive exit for weaker banks and RBI will ensure that there isn't any confusion in this process." |
| |
| He, however, added that RBI will take the role of an enabler but the final decision is with the management of the bank and the state government. |
| |
| As part of its developmental role for UCBs under the task force, RBI would also be assessing training, computerisation needs of the UCBs with the objective of upgrading their human resources skills and technological infrastructure so that they improve their operational efficiency and quality of management information systems. |
| |
| Commenting on the issue of dual control by RBI and respective state government over UCBs, Reddy said: "As the UCBs are subject to dual control, the MoUs which are being signed with various states is to put in place an arrangement through which there is a convergence on the approach and remedial actions required to be taken for facilitating the development of the sector." |
| |
| Talking about the bull run in the capital markets, Reddy said that all the concerned authorities are monitoring the situation closely and so far the RBI has not found any diversion of funds from UCBs to the equity markets. |
| |
| "We are always monitoring the situation and we will continue to watch closely the developments in the capital markets," Reddy stressed. |
| |
|
| |
