RBI to issue fresh guidelines for UCBs in June

NEW DELHI: The Reserve Bank will issue fresh guidelines for urban cooperative banks (UCBs) in June, 2012, Parliament was informed today.

"RBI in its monetary policy for 2012-13 has indicated a time-frame of June, 2012, for issue of fresh guidelines for UCBs," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.

Meena said that YH Malegam Committee constituted for bringing UCBs under the ambit of RBI has submitted its report to the central bank.

When asked about any recommendation made by the Committee and the follow-up action taken by the government thereon, Meena said that there should be entry point norms for UCBs with adequate capital and geographical spreads.

He further said, "There should be an organisational structure which will promote a healthy development of the sector and facilitate supervision and control."

On regulation front, he said that it should be made a condition of the licence that every new UCB should have a Board of Management with constitution and RBI should have powers for regulation and control as specified.

"The Board of Management should follow a code of corporate governance as specified by the RBI," he said, adding that every UCB should be audited by a chartered accountant to be appointed from panel maintained by the RBI.