Sun, 01 Oct 2023

New Delhi [India], June 9 (ANI): The Central Government on Friday announced four important initiatives to strengthen 1,514 Urban Co-operative Banks (UCBs) in the country, an official statement said.

"In a significant move, the Central government on Friday took four important initiatives to strengthen 1,514 Urban Co-operative Banks (UCBs) in the country realising Prime Minister Narendra Modi's vision of 'Sahakar se Samridhi," the statement said.

A detailed discussion was held in this regard by the Union Home Minister and Minister of Cooperation Amit Shah with Finance Minister Nirmala Sitharaman and Shaktikanta Das, Governor of the Reserve Bank of India (RBI).

After the meeting, RBI notified these measures to strengthen UCBs.

According to the official statement, "UCBs can now open new branches in order to expand their business; UCBs can also do one-time settlements at par with Commercial Banks; revised timelines for Priority Sector Lending (PSL) targets given to UCBs; and there will be a designating nodal officer in RBI.""UCBs can now open new branches up to 10 per cent (maximum five branches) of the number of branches in the previous financial year without prior approval of RBI in their approved area of operation. In order to avail of this facility, UCBs have to get the policy approved by their board and comply with the Financially Sound and Well Managed (FSWM) Norms," it added.

The RBI also notified a framework governing this aspect for all regulated entities including Urban Co-operative Banks.

"Now cooperative banks through board-approved policies may provide a process for technical write-off as well as a settlement with borrowers. This has brought cooperative banks to par with other commercial banks now," it mentioned.

The RBI has also decided to extend the timeline for UCBs to achieve PSL targets by two years up to March 31, 2026.

"The deadline of March 31, 2023, to achieve the PSL target of 60 per cent has now also been extended to March 31, 2024. The excess deposits, if any, after clearing the shortfall of PSL during Financial Year 2022-23 will also be refunded to UCB," the statement said.

"Since UCB work in urban areas unlike commercial banks who have branches in rural areas as well, they were facing hardships on this score. In order to meet the long pending demand of the cooperative sector for closer coordination and focused interaction, RBI has recently notified a nodal officer as well," it added. (ANI)

Sign up for Zambia News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!