The Reserve Bank of India (RBI) on Monday announced the setting up of an expert committee on regulation of primary urban cooperative banks (UCBs). The eight-member committee will be chaired by former RBI deputy governor NS Vishwanathan.
The other members are former chairman of National Bank for Agriculture and Rural Development (Nabard) Harsh Kumar Bhanwala, chartered accountant Mukund M Chitale, former bureaucrats NC Muniyappa and RN Joshi, IIM Bangalore professor MS Sriram, National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB) president Jyotindra M Mehta and chief general manager-in-charge of the RBI’s department of regulation Neeraj Nigam.
The committee’s terms of reference will include taking stock of the regulatory measures taken by the RBI and other authorities in respect of UCBs and assess their impact over the last five years to identify key constraints and enablers, if any, in fulfilment of their socio-economic objective. It will also review the current regulatory/supervisory approach and recommend suitable measures to strengthen the sector, taking into account recent amendments to the Banking Regulation Act, 1949.
The committee will be expected to suggest effective measures for faster rehabilitation and resolution of UCBs and assess potential for consolidation of the sector. It will consider the need for differential regulations and examine prospects to allow more leeway in permissible activities for UCBs with a view to enhance their resilience. It will also be expected to draw up a vision document for a vibrant and resilient urban co-operative banking sector with regards to the principles of cooperation as well as depositors’ interest and systemic issues.
The expert committee will submit its report within three months from the date of its first meeting. The RBI’s department of regulation will provide the necessary secretarial assistance to the committee.