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