Urban Cooperative Banks

India has over 800,000 cooperative societies, comprising around 200,000 cooperatives and 600,000 non-credit cooperatives

RBI advises UCB directors to ask tough questions to senior management to ensure ethical, transparent, and prudent operations, aiming to prevent distress in the banks

Augurs well for banks with relatively lower organic PSL generation

He said that the UCBs must maintain high standards of customer service to build and retain trust

RBI Governor Sanjay Malhotra advised the UCBs to ensure that they remain operationally resilient, including against IT and cyber-related risks

According to RBI norms, UCBs are required to have at least 50 per cent of their aggregate loans and advances consisting of small value loans by March 31, 2026

He said the government has decided to take up 54 programmes under the cooperative sector

PCA will replace the existing SAF from the beginning of the new financial year - Apr 2025. During FY24, 122 UCBs across the country came out of SAF. The number of UCBs stood at 1,470 at end of Mar '25

Shaktikanta Das stated that to provide more flexibility, avenues for UCBs to raise capital, a discussion paper on capital-raising avenues will be issued for feedback from stakeholders

Gives one time permission to transfer corpus to reserves

The new framework will be applicable to UCBs with deposits above Rs 100 crore

The RBI on Friday issued a prompt corrective action framework for urban cooperative banks with an aim to enabling supervisory intervention at an appropriate time. The provisions of the Prompt Corrective Action (PCA) Framework for Primary (Urban) Co-operative Banks (UCBs) will be effective from April 1, 2025. The objective of the PCA Framework is to enable supervisory intervention at an appropriate time and require the UCBs to initiate and implement remedial measures in a timely manner, to restore their financial health. The Reserve Bank had issued a Supervisory Action Framework (SAF) as an early intervention tool for bringing about desired improvements in weak UCBs and UCBs which are experiencing financial stress. The SAF was last revised in January 2020. "This PCA framework shall replace the SAF," the RBI said in a statement. The revised framework seeks to provide flexibility to design entity specific supervisory action plans based on the assessment of risks on a case-by-case ...

UCB executives said besides regulatory push for effective asset quality management, the upturn in credit growth and improvement in margins have helped enhance provision cover

Lenders that hold more than Rs 5 trillion in deposits are weaker after the pandemic

A majority of the advances of UCBs was given to MSMEs, amounting to Rs 1.3 trillion in FY23

With the repricing of loans and higher lending rates for fresh loans, the net interest margins improved from a low of 1.89 per cent in Fy20

Flags internal auditor's task for early detection of irregularities

Cooperation Minister Amit Shah on Saturday launched the National Urban Cooperative Finance and Development Corporation (NUCFDC) and asked the umbrella body to set up one urban cooperative bank in each town. NUCFDC has received the RBI approval to function as a non-banking finance company and a self-regulatory organisation for the urban cooperative banking sector. After the launch, Shah said, "After 20 years, NUCFDC has been established. This is the need of the hour. I am happy the RBI has given approval for this." Urban cooperative banks have been operating in India for a long time, but could not grow rapidly even though they can play a key role in the country's economic growth, he said. The main objective of NUCFDC should be to help urban cooperative banks adhere to the Banking Regulations Act and bring professionalism in their work, the minister said. There are more than 1,500 urban cooperative banks with 11,000 branches and a deposit of Rs 5 lakh crore across the country, he ..

He added that it is essential for the director to understand the bank's financial statements as it is important for laying down underwriting standards and assessing credit proposals

The RBI on Friday announced the increase in the monetary ceiling of gold loans that can be granted under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh for UCBs