Page 21 - Banking Finance August 2020

CO-OPERATIVE BANK NEWS

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RBI Extends Curbs Over 3 The RBI in separate notifications for teria as at the end of the current or
these two banks (The Kapol Coopera- subsequent financial years shall imple-
Maharashtra-based Coop- tive Bank and The Maratha Sahakari ment system-based asset classification
erative Banks - Customers Bank Ltd) said that extension should within a period of six months from the
not "per-se be construed to imply that end of the financial year concerned,"
Pay for Banks' Fault it is satisfied of substantive improve- the RBI said.
On 30 July 2020, the Reserve Bank of ment in the financial position of the
India (RBI) extended its directions to the aforementioned banks." System-based asset classification, re-
Vasantdada Nagari Sahakari Bank, the fers to asset classification (downgrad-
Kapol Cooperative Bank and the Maratha RBI asks urban cooperative ing as well as upgrading) carried out by
Sahakari Bank. All three urban coopera- the CBS /computerized systems of the
tive banks are from Maharashtra. banks to implement sys- bank in an automated manner on an
Mumbai-based Maratha Sahakari Bank tem-based asset classifica- ongoing basis, based on the relevant
RBI instructions/guidelines.
was placed under RBI directions vide tion from June 2021
directive dated 31 August 2016, from Meanwhile, the RBI has also asked all
The Reserve Bank has asked large ur- concerned UCBs to conduct pilot/par-
the close of business on 31 August 2016, ban cooperative banks (UCBs) to un-
for a period of six months. The validity allel run and evaluate the results for
dertake the system-based asset classi- accuracy/integrity of the asset classifi-
of the above directions has been ex- fication from June 30, 2021, to improve cation in compliance with the RBI in-
tended from time to time, the last one efficiency and transparency. The UCBs structions so that they can implement
being vide directive dated 18 March having total assets of over Rs 2,000
2020, valid up to 31 July 2020, for a crore as on March 31, 2020, will be it from the appointed date.
further period of five months from 1 required to implement the system-
August 2020 to 31 December 2020. based asset classification from June 30, Govt mulling merger of
The Kapol Co-operative Bank from 2021, an RBI circular said. District Co-op banks
Mumbai was placed under directions UCBs having total assets of over Rs The Uttar Pradesh government is mull-
vide directive dated 30 March 2017, 1,000 crore but less than Rs 2,000 ing a proposal to merge all the district
from the close of business on 30 March crore as on March 31, 2020 and hav- cooperative banks (DCBs) with the
2017. The validity of the above direc- ing self-assessed themselves as being apex cooperative banking body the 'UP
tions was extended from time to time, under Level III or Level IV on the Com- Cooperative Bank'.
the last one being vide directive dated prehensive Cyber Security Framework The proposed 'UP Cooperative Bank',
29 January 2020, valid up to 31 July will be required to implement system- created after the merger, will comprise
2020, for a further period of six based asset classification from Septem- more than 1,000 branches with a bal-
months from 1 August 2020, to 31 ber 30, 2021. ance sheet of nearly Rs 35,000 crore,
January 2021. "UCBs which meet the (specified) cri- which could even grow to more than

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