RBI Wants Urban Cooperative Banks to Focus Mainly on Priority Sector

RBI wants urban cooperative banks to focus mainly on priority sector

UCBs’ objective for need part loaning has been proposed at 75 percent of their credit from 40 percent now

The Reserve Bank of India (RBI) on Monday suggested that the single and gathering borrower breaking points of urban helpful banks (UCBs) ought to be cut down and a large portion of the advances given ought not be of more than Rs 25 lakh, while the need area loaning targets ought to be raised steeply.

UCBs’ objective for need division loaning has been proposed at 75 percent of their credit from 40 percent now.

The objective must be come to in stages — 50 percent by March 2021, 60 percent by March 2022, and 75 percent by March 2023.

The RBI suggested that the single and gathering borrower points of confinement ought to be 10 percent and 25 percent, individually, of a bank’s level 1 capital. At present, UCBs are permitted to have exposures of up to 15 percent and 40 percent of their capital assets to a solitary borrower and a gathering of borrowers, individually.

Urban helpful investors said the draft standards were like those endorsed for little money banks (SFBs). These standards, on the off chance that they become rules, will hamper the development of cooperatives, they said. The move is by all accounts to push UCBs to become SFBs, they said…