A panel set up by the Reserve Bank of India has proposed that the existing well managed co-operative credit societies meeting certain financial criteria like profits, capital adequacy and NPA proportion should be given priority for granting licences as urban co-operative banks (UCBs) particularly in unbanked or inadequately banked centres. Acknowledging the importance of urban co-operative banks for financial inclusion, the RBI panel suggested that new entrants should be encouraged to open banks and branches in unbanked or inadequately banked area. UCBs play a useful role and there is need for a greater presence of UCBs in unbanked districts and in centres having population less than 5 lakh, the RBI panel headed by YH Malegam said in the report. “It is necessary to encourage new entrants to open banks and branches in states and districts which are unbanked or inadequately banked,” it said. It is equally necessary to discourage new entrants from opening branches in districts and population centres which are already adequately banked, it said. As far as capital requirement is concerned, the panel suggested minimum paid up capital of from Rs 50 lakh to Rs 5 crore depending on the area of operation.
IE
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