RBI allows all USBs to act as PAN service agent

MUMBAI: The Reserve Bank has allowed all urban cooperative banks (UCBs) to act as PAN service agent.

Earlier, only financially sound and well managed UCBs were allowed to act as PAN service agent. They were allowed to do so only after entering a tie-up with UTI Infrastructure and Technology Services Ltd (UTIITSL), NSDL e- Governance Infrastructure Ltd or with an agency authorised by Income Tax Department.

"With a view to expanding the scope of fee-based services offered by UCBs, it has now been decided to permit all UCBs to act as PAN Service Agent (PSA) by entering into a tie-up with any agency authorised by Income Tax Department," RBI said in a notification.

As per RBI rules, financially-sound UCBs should have a maintenance of a minimum CRAR (Capital to Risk-Weighted Assets Ratio) of 10 per cent on a continuous basis.

Their gross NPAs (non-performing assets) should be less than 7 per cent and net NPAs or bad loans should not exceed 3 per cent.

Also, there should not be any default in maintenance of CRR/SLR (cash reserve ratio/statutory liquidity ratio) during the preceding financial year; should have a continuous net profit for the last three years and sound internal control system with at least two professional directors on the board.