The expert committee comprising eight members will be led by a former RBI deputy governor N S Vishwanathan
The Reserve Bank of India (RBI) has formed an expert committee on urban co-operative banks (UCBs) to address the issues and provide a framework for strengthening the sector.
RBI’s decision follows the Punjab and Maharashtra Cooperative (PMC) Bank crisis, which has not been resolved for a year.
The expert committee comprising eight members will be led by a former RBI deputy governor N S Vishwanathan, as chairman.
The committee aims to assess the RBI and other authorities’ regulatory measures on UCBs, along with their impact over the last five years to identify key constraints and enablers in fulfilment of socio-economic objective.
The Indian central bank said that the panel would review the current regulatory or supervisory approach and recommend appropriate measures to strengthen the sector.
It would consider recent amendments to the Banking Regulation Act 1949, as applicable to co-operative societies.
Also, the committee would suggest effective measures for rapid resolution of UCBs and evaluate the potential for consolidation in the sector.
The new expert committee will consider the need for differential regulations and assess prospects to enhance scope in permissible activities, to enhance the resilience for UCBs.
Creating a vision document for a resilient urban co-operative banking sector, the team will have regards to the principles of cooperation along with depositors’ interest and systemic issues.
The committee is anticipated to submit its report after three months of its first meeting, and the Department of Regulation (DoR) would provide the necessary secretarial assistance to the committee.