A Reserve Bank of India (RBI) committee has recommended conversion of Urban Cooperative Banks (UCBs) with business size of 20,000 crore rupees or more into regular banks. The main aim is to allowing UCBs to grow and proliferate further for financial inclusion.
A committee was set up which prepared the detail report on UCBs. The High Powered Committee on UCBs was constituted in January 2015 on the recommendation Malegam Committee (Expert Committee on Licensing of New UCBs). Terms and reference of the committee was to examine and recommend on issues of conversion of UCBs into commercial banks. The committee work was to examine permissible business lines and appropriate size of UCBs for conversion purpose.
The commitee was headed by RBI deputy governor R Gandhi. In order to minimise the systemic risk, the committee has recommended that large UCBs convert themselves into commercial banks. However, the conversion will not be compulsory for large UCBs and they can continue the way they operate currently in terms of balance sheet or asset size.
The RBI has invited suggestions and comments from public on this report by September 18 2015.
For conversion
Condition:
- UCBs with business size of less than 20,000 crore.
- UCB’s who are willing to convert to Small Finance Banks can apply to the RBI.
Issuing of License:
Licenses for conversion to operate as UCBs will be issued financially sound cooperative credit societies having a minimum track record of 5-years. With the conversion, UCBs will be allowed to grow and proliferate further to meet the objective of financial inclusion.
Some General Related Question:
Bank rate is decided by _________.
In which city Head Office of Reserve Bank of India located?
