Page 53 - Banking Finance July 2021

RBI CIRCULAR

RBI

CIRCULAR

New Definition of Micro, Small and Appointment of Chief Risk Officer in

Medium Enterprises Primary (Urban) Co-operative Banks
RBI/2021-2022/63 RBI/2021-2022/62

June 25, 2021 June 25, 2021

1. Please refer to the circular FIDD.MSME & NFS.BC.No.4/ 1. With increasing size and scope of business, Primary
06.02.31/2020-21 dated August 21, 2020 on ‘New (Urban) Co-operative Banks (UCBs) are gradually
Definition of Micro, Small and Medium Enterprises – getting exposed to greater degree of risks. It is,
clarifications’. therefore, necessary that every UCB focuses its
attention on putting in place appropriate risk
2. In this connection, we inform that Government of
management mechanism commensurate with its
India, vide their Gazette Notification S.O. 2347(E) dated
business profile and strategic objectives. In this
June 16, 2021, has notified amendments in paragraph
connection, it has been decided that all UCBs having
(7) sub-paragraph (3) in the notification of Government
asset size of Rs. 5000 crore or above, shall appoint a
of India, Ministry of Micro, Small and Medium
Chief Risk Officer (CRO). The Board must clearly define
Enterprises number S.O. 2119 (E), dated June 26, 2020,
the CRO’s role and responsibilities and ensure that he/
published in the Gazette of India.
she functions independently.
3. In view of the above amendment, paragraph 2.2 (i) of
2. UCBs shall strictly adhere to the following instructions
RBI circular dated August 21, 2020 stands modified as
in this regard:
under:
a. The CRO shall be a senior official in the bank’s
“The existing Entrepreneurs Memorandum (EM) Part hierarchy and shall have adequate professional
II and Udyog Aadhaar Memorandum (UAMs) of the qualification / experience in the area of risk
MSMEs obtained till June 30, 2020 shall remain valid management.
till December 31, 2021”.
b. The CRO shall be appointed for a fixed tenure with
4. All other provisions of the circular remain unchanged. the approval of the Board. The CRO can be
transferred / removed from the post before
(Kaya Tripathi) completion of the tenure only with the approval
Chief General Manager of the Board and such premature transfer /
removal shall be reported to the concerned

BANKING FINANCE | JULY | 2021 | 53