Context: The government has taken steps to strengthen 1,514 urban co-operative banks (UCBs) by implementing four key measures, as notified by the Reserve Bank of India (RBI).
Measures notified by the RBI are:
|New Branches||UCBs can open new branches up to 10% (maximum 5 branches) of the previous year’s branch count. UCBs have to get the policy approved by their board and comply with the Financially Sound and Well Managed (FSWM) Norms|
|One-Time Settlement||UCBs can also do One-Time Settlements at par with commercial banks. UCBs can have board-approved policies for technical write-offs and settlements with borrowers|
|Priority Sector Lending (PSL)||Extension of timeline by two years (until March 31, 2026) to achieve PSL targets. Deadline extension from March 31, 2023, to March 31, 2024, to achieve the PSL target of 60%|
|Designating Nodal Officer in RBI||Appointment of a Nodal Officer in RBI for closer coordination and focused interaction|