The Reserve Bank of India (RBI) has constituted a High Powered Committee (HPC) to re-examine and recommend appropriate set of businesses, size, conversion and licensing terms for the Urban Cooperative Banking (UCB) Sector. The HPC is headed by RBI Deputy Governor R Gandhi. The committee will look into the lines of businesses that can be permitted for UCBs and the necessary benchmarks in terms of size of business, capital requirement, regulatory regime, etc.
The committee will examine whether the time is opportune to give licences to new UCBs and if so the modalities of taking forward the recommendations of the Malegam Committee, which suggest that 50 per cent of deposits should be held by voting members.
Knowledge is Wealth
- The term Urban Co-operative Banks (UCBs) refers to primary cooperative banks located in urban and semi-urban areas.
- In 1963, Varde Committee recommended that UCBs should be organised at all Urban Centres with a population of 1 lakh or more and not by any single community or caste.
- The Madhavdas Committee (1979) evaluated the role played by UCBs in greater details and recommended support from RBI and Government in the establishment of such banks in backward areas.
- In India, about 79% of UCBs are located in five states. ie Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.