RBI revises co-op bank norms

Move comes after central bank superseded the board of New India Co-op Bank and imposed restrictions on it

- Anshika Kayastha

Weeks after it superseded the board of and imposed restrictions on New India Co-operative Bank, the central bank has revised some lending norms for urban co-operative banks (UCBs), including expanding the definition of small-value loans, hiking real estate exposure limits and provisioning requirements for investment in security receipts (SRs).

The norms have been revised with the aim of rationalization, "thereby allowing greater operational flexibility to UCBs without diluting the regulatory objectives," the regulator said in a release. The revised regulations will come into effect immediately.

Earlier this month, on 14 February, RBI superseded the board of Maharashtra-based New India Co-operative Bank for 12 months, one day after imposing several restrictions, due to poor governance, irregularities in its lending business, material supervisory concerns and misappropriation of funds. RBI has appointed an administrator to manage the bank's affairs.