The Reserve Bank of India has set up an expert committee on urban co-operative banks (UCBs) to provide a road map for strengthening the sector and also evaluate the prospects for consolidating the sector.
The committee will be headed by former deputy governor of RBI, N S Vishwanathan. Other members include Harsh Kumar Banwala, former Chairman Nabard, Mukund M Chitale, Chartered Accountant, N C Muniyappa, R N Joshi, M S Sriram, Professor IIM Bangalore, Jyotindra M Mehta, and Neeraj Nigam, chief general manager RBI.
The expert committee has been asked to submit its report within three months. Among the terms of reference, it has been asked to look into regulatory measures that the central bank has taken with respect to the UCBs and evaluate the impact it has had over the period of five years. Also, they have been asked to suggest measures to strengthen the sector post the amendments to the Banking Regulation Act, 1949, which gives more power to the central bank to supervise them.
“The amendments have brought near parity in regulatory and supervisory powers between UCBs and commercial banks in respect of regulatory powers including those related to governance, audit and resolution”, the RBI said in its regulatory policies in the last monetary policy meet held on February 5.
The expert committee will also evaluate the need for differential regulations and look at the prospect of allowing more flexibility in permissible activities for UCBs with a view to enhance their resilience. More importantly, it will look at prospects of consolidation in the sector, the RBI said in its circular.
They also have to come up with a vision document for a vibrant and resilient UCB sector keeping in mind the depositors’ interest and systemic issues.
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