RBI Proposes New Guidelines to Transform Urban Cooperative Banks
The Reserve Bank of India (RBI) plans to introduce harmonized norms for urban cooperative banks (UCBs) to ensure a standardized eligibility criteria for business authorizations, permissions, and approvals. Major UCBs meeting the eligibility criteria could expand operations beyond their registered state, subject to certain conditions and prior RBI approval.
- Country:
- India
In a significant policy shift, the Reserve Bank of India (RBI) has proposed revised guidelines for urban cooperative banks (UCBs) to streamline their business authorizations and approvals. The new criteria aims to create a unified framework for UCB operations.
The draft guidelines suggest that sizeable UCBs, categorized under Tier 3 and Tier 4 with a net worth of at least Rs 50 crore, may expand their operational reach beyond their home state, contingent on prior RBI consent. These banks may venture into up to two additional states annually, provided they maintain adequate capital for at least five branches in each state.
The RBI's proposal also highlights that UCBs can extend their operations within their home districts and up to three additional districts without needing prior approval. The invitation for public comments on these drafts remains open until August 25, 2025, signaling a participative regulatory approach by the RBI.
(With inputs from agencies.)
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