RBI constitutes High Powered Committee on Urban Co-operative Banks - Banknet India



RBI constitutes High Powered Committee on Urban Co-operative Banks

The Reserve Bank of India has set up a High Powered Committee on 30th Jan 2015 to re-examine and recommend appropriate set of businesses, size, conversion and licensing terms for the Urban Cooperative Banking Sector.

The committee will be chaired by R Gandhi, Deputy Governor, RBI. The terms of reference of the High Powered Committee are:

What lines of business (that commercial banks undertake) can be permitted for UCBs and what should be the benchmark in terms of size of business, capital requirement, regulatory regime etc.;

In view of the limited legal powers and resolution options, what should be the appropriate size upto which a UCB may be able to grow without undue risk to the system, under the current regulatory framework;



When enabling legal framework is in place for conversion of a co-operative bank into a joint stock bank, what should be the criteria for allowing voluntary conversion by a UCB? What should be the benchmarks in terms of asset size, capital, etc., for mandatory conversion of UCB to a Joint Stock bank?

Examine whether the time is opportune to give license to new UCBs as per the recommendations of the Expert Committee on Licensing of New UCBs, (Malegam Committee) and if so the modalities of taking forward the recommendations of Malegam Committee;

Determine the modalities of implementing the suggestion of the Malegam Committee that 50 per cent in value of deposits should be held by voting members to assure that confidence regarding proper management is generated among investors. Alternatively propose a feasible structure that puts majority voting in the hands of contributors of funds;

Other members are - Shri M.A.Narmawala, Commissioner for Co-operation & Registrar of Cooperative Societies, Gujarat, Shri M.V.Tanksale, Chief Executive, Indian Banks’ Association, Dr. M. L. Abhyankar, President, National Federation of Urban Co-operative Banks (NAFCUB), Shri S.K.Banerji, Managing Director, Saraswat Cooperative Bank Ltd, Shri D Krishna, Former Chief Executive, NAFCUB, Smt. Suma Varma, Principal Chief General Manager, DCBR, Reserve Bank of India will be the Member Secretary. and Shri Joseph Raj, Joint Legal Adviser, Legal Department, Reserve Bank of India shall be a permanent invitee.