RBI says 14 Urban Cooperative Banks cancelled their license in 2011-12
March 15, 2013‐ New Delhi, India
The number of Urban Cooperative Banks (UCBs) whose license was cancelled in the last three years are, 31 in 2009-10, 12 in 2010-11 and 14 in 2011-12.
Reserve Bank of India (RBI), the licensing authority for UCBs announced in the Annual Policy Statement (2004-05) that no fresh proposals for new UCBs would be considered till a comprehensive policy including an appropriate legal and regulatory framework for the sector is put in place. There has been no change in the policy of RBI since then. An Expert Committee on the subject was constituted in April, 2010 which submitted its report to RBI in September, 2011.
RBI has, from time to time, taken a number of steps to strengthen the financial position of UCBs, which, inter alia, include ;-
Allowing merger of UCBs to encourage merger/amalgamation and to provide an avenue for non-disruptive exit route for weak UCBs;
Allowing UCBs to raise share capital;
Allowing financial restructuring of weak UCBs by conversion of deposits into equity;
Entering into MOU with State Governments/UTs and Central Government (for multi-State UCBs) to address the problem of dual control of UCBs by RBI and Registrar of Cooperative Societies; and
Setting up a Task Force on Urban Cooperative Banks in each State/UT with an objective to have a consultative arrangement for identifying weak and potentially viable entities and turning them around and also to provide a non disruptive exit path to unviable entities so as to ensure continuous process of monitoring of such UCBs
This was stated by Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in the Lok Sabha today.
(Release ID :93810)
Press Release Source: PIB
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