UCBs are meant primarily to meet the credit needs of the society
The Reserve Bank of India (RBI) has advised UCBs, as a matter of principle, generally not to grant large value loans to Public Sector/Government Undertakings (PSUs). RBI said in a notification that granting of high value loans to PSUs is not consistent with the co-operative principles and dilutes the cooperative character of UCBs.The RBI had observed that a few Urban Cooperative Banks (UCBs) have been sanctioning high value loans to Public Sector Undertakings (PSUs) by admitting them as nominal members or otherwise.
As per the RBI, the UCBs are meant primarily to meet the credit needs of the society by providing loans and advances to low/middle income groups (small borrowers), agriculture and small businesses for furthering the cause of cooperation.
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