ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 10th August. Click Here for more information.
Source: Business Standard
What is the news?
A brand-new licensing regime for urban co-operative banks (UCBs) is on the cards for financially sound and well-managed co-operative credit societies. This comes 17 years after the Reserve Bank of India (RBI) stopped issuing them.
Expected Reforms in UCBs
- Constituting a board of management (BoM) for UCBs with deposits of over Rs 100 crore. BoM would have specialists drawn from accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, and information technology
- Framing of modalities for a national umbrella organization
- Refresh of the National Cooperative Development Policy (2002)
N S Vishwanathan committee
- The expert committee on primary (urban) co-operative banks, headed by former RBI deputy governor N S Vishwanathan, is expected to submit its report within a fortnight.
- Its mandate is to take stock of the regulatory measures taken by the RBI and other authorities for UCBs and assess their impact over the past five years.
- It will also identify key constraints and enablers in fulfillment of their socio-economic objective, and review the current regulatory and supervisory approach.
The RBI’s Report on Trend and Progress of Banking in India about UCB’s
- Co-operative banks, with their grass-root level customer base and domain knowledge, can attract new customers and retain existing clientele.
- However, A change in outlook, processes, business model, and strategy are, required to achieve goals in a new development strategy that is in sync with the fast-changing landscape
- On the technology front, more than 99% of them are now compliant with the adoption of core banking solutions norms.
Terms to know:
