Financial Daily from THE HINDU group of publications
Saturday, Mar 05, 2005

Port Info

Group Sites

Home Page - RBI & Other Central Banks
Money & Banking - Co-operatives

UCBs with Rs 50 cr deposits to be on a par with commercial banks

Our Bureau

Mumbai , March 4

THE Reserve Bank of India proposes to treat urban co-operative banks with deposit of over Rs 50 crore on a par with commercial banks for the purpose of regulation. However, this would be subject to the existing relaxations that are in force.

In a draft vision document on urban co-operative banks (UCBs) released for public comment, the central bank said UCBs having one branch with deposits of less than Rs 50 crore should be subjected to simpler regulatory and supervisory requirements.

Such banks in particular are proposed to be given an additional three years to classify non-performing assets based on 90 days' delinquency norm. They would be required to build adequate provisions during this period to transit to the 90-day norm at the end of three years.

The vision document also proposes to set up a State-level task force on UCBs comprising officials from the RBI, the State Governments and representatives from the sector in five States with high concentration of UCBs — Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu.

The central bank would also explore other States where banks' licence applications are pending with the RBI, a press release issued by RBI said.

The vision document intends to put in place a mechanism that would address the problems of dual control, a consultative arrangement for identifying weak but potentially viable entities, the apex bank said. It would also identify unviable entities and provide timely exit route, it added.

The document suggested signing of a memorandum of understanding between the RBI and the State Governments to ensure that the difficulties caused by dual control are suitably addressed.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Industry can help in framing fringe benefit tax rules: Chidambaram

What is branded jewellery? Finance Ministry clarifies
Inflation dips on cheaper manufactured items
Tourism Minister moots cess on Indians travelling abroad
Rahul Bajaj to quit as Bajaj Auto MD — Sons Rajiv, Sanjiv to take control
Scandent Solutions set to list next week
Sensex gains 64 pts at 6,850 — Investors find shine of bourses hard to resist
Chidambaram kudos to India Inc on Sensex gains
Selling India story: The Singapore edition
UCBs with Rs 50 cr deposits to be on a par with commercial banks
Tribunal dismisses Reliance Info petition against DoT penalty

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line