Permission for new branches for UCBs only after amending bye-laws to set up a Board of Management

Mumbai: In a move to ensure more professionalism and ensure better governance in the co-operative sector, the Reserve Bank of India has reiterated that Urban Cooperative Banks (UCBs) will be allowed to open new branches only if they amend laws to set up a Board of Management (BoM).

“It is proposed in the guidelines to require UCBs to make a provision in their bye laws for setting up a BoM” the RBI said in its statement of developmental and regulatory policies on Wednesday. “ The guidelines also propose that regulatory approvals such as expansion of area of operation and opening of new branches may be allowed only for UCBs that have made such a provision in their bye laws”

The central bank clarified that it would issue final guidelines only licencing of new UCBs only after they receives appropriate plans from it stake holders. “ Taking into consideration the responses received, it is proposed to issue final guidelines by the end of December 2018” it said.


The Expert Committee on licensing of new Urban Co-operative Banks (2010) under the chairmanship of Shri Y.H. Malegam had recommended, inter alia, that a Board of Management (BoM) be constituted in every Primary (Urban) Co-operative Bank (UCB), in addition to the Board of Directors (BoD) with a view to strengthening governance in the UCBs. This was reiterated by the High Powered Committee on Urban Co-operative Banks (Chairman: Shri R. Gandhi) constituted in January 2015.