Page 19 - Banking Finance December 2022

erative Bank (RAFC) in Chennai, Erode The four-tiered regulatory framework, comply with higher regulatory require-
and 7 other cities. Fake passbooks, based on size of deposits of the UCBs, ments...," the RBI said.
deposit forms, debit and credit cards will come into force with immediate
In another circular, the RBI has listed
among others were reportedly found effect.
out the net worth and capital ad-
in his possession.
The extant regulatory framework clas- equacy requirements of the UCBs.
sifies UCBs into two tiers -- Tier I and
Tier 1 UCBs operating in a single dis-
RBI imposes Rs 1.25 crore Tier II. trict should have minimum net worth
In a circular, the RBI said given the of Rs 2 crore. For all other UCBs (in Tier
penalty on Zoroastrian Co-
heterogeneity in the cooperative sec- 1, 2 and 3) tiers), the minimum net
operative Bank tor, a tiered regulatory framework is worth should be Rs 5 crore.
The Reserve Bank of India has imposed required.
a penalty of Rs 1.25 crore on Zoroas-
Such a framework is needed to balance
trian Co-operative Bank, Mumbai for
the spirit of mutuality and co-opera- Attention Subscribers
non-compliance with certain direc-
tion more prevalent in banks of smaller Please renew your Subscription of
tions, including one related to dis-
sizes and those with limited area of Banking Finance Journal to receive
counting of bills.
operation vis-a-vis the growth ambi- copy of the journal uninterruptedly.
In a release, the RBI said the bank had tions of the large-sized UCBs and un-
You can now pay by GPAY, Phonepe,
failed to comply with its directions on dertake more complex business activi-
Paytm, Amazon, ICICI Pay, BHIM UPI
'Discounting of Bills by UCBs - Re- ties.
stricted Letters of Credit (LC)' and the
"... it has been decided to adopt a four-
provisions of the Rules, as it discounted
tiered regulatory framework, as
accommodation bills under LCs without
against the existing two-tiered frame-
establishing the genuineness of under-
work, for categorisation of UCBs," it
lying transactions/ documents and
said.
failed to preserve records in good or-
der for a period of eight years. Going forward, the categorisation may
be used for differentiated regulatory
In a separate release, the RBI said a
prescriptions aimed at strengthening
penalty of Rs 20 lakh has been imposed
the financial soundness of the UCBs.
on Indian Mercantile Co-operative
Bank, Lucknow for non-compliance The RBI has categorised all unit UCBs
with the certain norms related classi- and salary earners' UCBs (irrespective
fication of non-performing assets. of deposit size), and all other UCBs
having deposits up to Rs 100 crore in
RBI comes out with four- Tier 1.
tiered regulatory frame- In Tier 2, it has placed UCBs with de-
posits more than Rs 100 crore and up
work for urban coopera-
to Rs 1,000 crore. Tier 3 will cover
tive banks banks with deposits more than Rs
1,000 crore and up to Rs 10,000 crore.
The Reserve Bank of India (RBI) on You can also make payment for
Thursday announced a four-tiered UCBs with deposits more than Rs purchase of Books/Exam Guides
regulatory framework for categori- 10,000 crore have been categorised in from www.sashipublications.com
sation of Urban Co-operative Banks Tier 4. through above QR Code
(UCBs),
"If a UCB transits to a higher Tier on For any query please call
Besides, the central bank has come out account of increase in deposits in any 9073791022/9883398055
with norms pertaining to the net worth year, it may be provided a glide path
www.sashipublications.com
and capital adequacy of these banks. of up to a maximum of three years, to

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