Cracks in co-ops? Irregularities persist in UCBs despite RBI interventions

RBI's initiatives to promote sound governance practices in UCBs include introducing a four-tiered regulatory framework, direct engagement with directors on UCB boards

The cooperative banking sector is in the headlines again – not for the right reasons, though. An urban cooperative bank (UCB) has invited regulatory ire for alleged financial irregularities. It is not the first one.

 

This is despite the many initiatives of the Reserve Bank of India (RBI) to promote sound governance practices in UCBs. These include introducing a four-tiered regulatory framework, direct engagement with directors on UCB boards, and efforts to address IT and cybersecurity risks within these banks.

 

Earlier this month, the RBI prohibited the Mumbai-based New India Cooperative Bank from issuing fresh loans, and also suspended deposit