Voluntary Transition of Primary Co-operative Banks into Small Finance Banks.
- By sunder rawat /RBI /1 year ago /67
Voluntary Transition of Urban Cooperative Banks into Small Finance Banks.
The High Powered Committee on Urban Cooperative Banks (UCB), chaired by Shri R. Gandhi, the then Deputy Governor of Reserve Bank, had, inter alia, recommended the voluntary conversion of large Multi-State UCBs into Joint Stock Companies and other UCBs which meet certain criteria into Small Finance Banks (SFBs). Taking these recommendations into consideration, it has been decided to allow voluntary transition of UCBs meeting the prescribed criteria into SFBs. The detailed scheme will be announced separately.
In terms of Section 5 (ccv) read with Section 56 of the Banking Regulation Act, 1949 a primary co-operative bank (Urban Co-operative Bank or UCB) means a co-operative society, other than a primary agricultural credit society, whose,
a) Primary object or principal business of which is the transaction of banking business;
b) Paid-up share capital and reserves of which are not less than one lakh of rupees; and
c) Bye-laws of which do not permit admission of any other co-operative society as a member: Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose.