RBI revises supervisory action framework for UCBs

Depending on the severity of stress, the RBI may advise the UCB to submit a board-approved action plan for reducing its net NPAs below 6 per cent, it said.

The Reserve Bank of India has decided to tighten the supervisory action framework (SAF) of primary urban co-operative banks to bring about the desired improvement in the UCBs, as also expeditious resolution of UCBs experiencing financial stress.

“A UCB may be placed under SAF when its net NPAs exceed 6 per cent of its net advances,” the RBI said. The RBI will continue to monitor asset quality, profitability, capital and net worth of UCBs under the revised SAF, it said.

Depending on the severity of stress, the RBI may advise the UCB to submit a board-approved action plan for reducing its net NPAs below 6 per cent, it said. It will advise the UCB’s board to review the progress under the action plan on a quarterly or monthly basis and ask the UCB to submit the post-review progress report to the RBI.