RBI panel sets Rs5 crore capital base for new multi-state urban co-op banks
12 Sep 2011
The Malegam Committee set up by the Reserve Bank of India (RBI) to recommend a new licensing policy for urban co-operative banks (UCBs) in the country has suggested higher capital provisioning for all new UCBs.
The committee headed by Y H Malegam also suggested segregation of the ownership pattern of the UCB as a co-operative society and its functioning as a bank. The board of management should be separate from the board of management.
For UCBs that propose to operate in more than one state after five years of successful operation in one state, the committee headed by Y H Malegam has suggested a minimum capital requirement of Rs5 crore (Rs500 lakh).
For UCBs operating in only one state and do not propose to open branches in 'C' and 'D' category population centers, the minimum capital base has been fixed at Rs3 crore (Rs300 lakh).
The minimum capital for UCBs operating in only one state with 50 per cent or more branches in 'C' and 'D' category population centers has been fixed at Rs1 crore (Rs100 lakh).
For urban cooperative banks in the North East, the minimum capital base required, however, has been fixed at a low Rs0.5 crore (Rs50 lakh).
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