Insider Lending May Be On Its Way Back At Urban Co-Ops

Breather shows Mint St under political pressure

The breather given to primary urban co-operative banks (UCBs) on the clampdown of insider lending may be a prelude to doing away with the ban altogether.

Indications to this effect are coming through as various UCB federations, political parties and even the union minister of state for finance have jumped into the fray to lobby with the Joint Parliamentary Committee (JPC) and the finance minister for quashing the ban.

On Tuesday, the Reserve Bank of India (RBI) said the ban on UCBs extending loans and advances (both secured and unsecured) to their directors, their relatives and the firms/ concerns/ companies will be effective from October 1, 2003. The RBI had, on April 29, imposed the ban with immediate effect.

 

The Union minister of state for finance, Anandrao Adsul, has already dubbed the ban as