RBI forms panel to make urban cooperative banks stronger

KOLKATA: Reserve Bank of India has formed a panel to examine whether this is the right time for doling out new licenses to urban coooperative banks.

The panel, to be headed by deputy governor R Gandhi, will review the urban cooperative banking set up as a whole and suggest ways to make the banks stronger.

RBI said the panel will suggest new lines of business for UCBs and what should be the benchmark in terms of size of business and capital requirement.

It would look at the criteria for allowing voluntary conversion by a UCB into a joint stock bank and what should be the benchmarks in terms of asset size, and for mandatory conversion of UCB to a joint stock bank.

The panel would also look at "what should be the appropriate size up to which a UCB may be able to grow without undue risk to the system"

RBI told the panel to submit its report within three months from the date of its first meeting.