Page 17 - Banking Finance August 2023

RBI eases regulations, co- Mehta further said that over 50% of bank, 99.98 per cent of the depositors
urban cooperative banks in Gujarat are entitled to receive full amount of
op banks set for expan-
meet the FSWM criteria, indicating their deposits from DICGC," it said.
sion their financial strength. These banks Giving reasons for cancellation of the
are now looking to expand their pres-
Gujarat is set to witness a new phase licence, it said United India Co-opera-
ence in their respective areas of opera-
of expansion in the urban cooperative tive Bank, based out of Bijnor in Uttar
tion. "Since the setback faced by the
banking sector, as the Reserve Bank of Pradesh, does not have adequate capi-
Madhupura Urban Cooperative Bank
India (RBI) has granted permission for tal and earning prospects.
in 2002, Gujarat-based cooperative
urban cooperative banks to open new
"The bank with its present financial
banks have shown resilience.
branches without its approval.
position would be unable to pay its
Currently, Gujarat has 214 urban coop- present depositors in full," the RBI
RBI cancels licence of
erative banks with a total of 1,113 said, adding that the continuance of
branches. Following this decision, it is United India Co-operative the bank is prejudicial to the interests
anticipated that the state will see the of its depositors.
Bank
addition of at least 100 new branches
The Reserve Bank of India (RBI) said it
within the next year. RBI imposes curbs on Na-
has cancelled the licence of Uttar
Chairman of the Gujarat Urban Coop- tional Coop Bank, the
Pradesh-based United India Co-opera-
erative Banks Federation, Jyotindra
tive Bank Limited, citing lack of ad- Bengaluru bank
Mehta, stated that the automatic
equate capital and earning prospects.
route for new branch openings had The Reserve Bank of India (RBI) an-
Consequently, the bank ceases to carry
nounced a series of restrictions on one
been halted since 2017. "However, the
on business, with effect from the clos-
of Bengaluru's oldest institutions, The
RBI's recent decision allows urban co-
ing hours, the RBI said in a statement.
operative banks to open a maximum National Cooperative Bank, in re-
On liquidation, it said every depositor sponse to its deteriorating financial
of five branches or 10% of their exist-
would be entitled to receive deposit position, allowing it to disburse only up
ing branches without prior approval.
insurance claim amount of his/her de- to Rs 50,000 to depositors in all types
These banks must obtain approval
posits up to a ceiling of Rs 5 lakh from of account.
from their respective boards and com-
the Deposit Insurance and Credit Guar-
ply with the financially sound and well The RBI issued the directions to the 48-
antee Corporation (DICGC).
managed (FSWM) norms set by the year old bank using its powers under the
RBI," he said. "As per the data submitted by the Banking Regulation Act, 1949.
BANKING FINANCE | AUGUST | 2023 | 17