Mumbai: Aiming to strengthen 1,514 urban co-operative banks, the centre on Friday said that the Reserve Bank has notified four key measures, including giving them two years more to meet the priority sector lending targets. The Ministry of Cooperation in a statement said that four important initiatives have been taken to strengthen 1,514 Urban Co-operative Banks (UCBs) in the country.
“Pursuant to detailed discussions held by Union Home Minister and Minister of Cooperation Amit Shah, with Finance Minister Nirmala Sitharaman and Governor, Reserve Bank of India (RBI), the RBI has notified these vital measures to strengthen Urban Co-operative Banks,” it said.
The ministry has listed the four measures notified by the RBI.
In order to expand their business, UCBs can now open new branches up to 10 percent (maximum 5 branches) of the number of branches in the previous financial year without prior approval of RBI in their approved area of operation. UCBs have to get the policy approved by their board and comply with the Financially Sound and Well Managed (FSWM) Norms. UCBs can also do One-Time Settlements at par with commercial banks
Since UCBs work in urban areas, unlike commercial banks which have branches in rural areas as well, they were facing hardships on this score, the ministry said. In order to meet the long pending demand of the cooperative sector for closer coordination and focused interaction, the RBI has recently notified a nodal officer as well. These initiatives will further strengthen the UCBs.
“Under the leadership of Prime Minister Narendra Modi, the Ministry of Cooperation is committed to strengthen cooperatives and treating them at par with other forms of economic entities, both as beneficiaries and participants,” it said.
