RBI cancels licence of 78 UCBs since 2014; highest in Maharashtra

The Reserve Financial institution of India (RBI) has cancelled the licenses of 78 City Cooperative Banks (UCBs) since calendar 12 months 2014, of which 46 % are from Maharashtra, in accordance with paperwork tabled in Parliament.

Insufficient capital, poor incomes prospects, deteriorating monetary place, and the continuation of operations being prejudicial to the pursuits of depositors and the general public at giant, said Pankaj Chaudhary, Union Minister of State for Finance in a reply tabled in Rajya Sabha on July 30.

In 2024 alone (until July), licenses of 10 UCBs had been cancelled of which two every are in Maharashtra, Karnataka and Uttar Pradesh, whereas one every is from Gujarat, Rajasthan, Assam and Andhra Pradesh. In 2023, licenses of 14 UCBs and in 2022 licenses of 12 UCBs had been cancelled. 

Nonetheless, if the general figures since 2014 is taken under consideration, then Maharashtra leads with 36 co-operative banks shedding their licenses, adopted by Uttar Pradesh (14 banks) and Karnataka (8 banks). Two UCBs in Gujarat have additionally misplaced their licences throughout this era with the most recent being Shree Mahalaxmi Mercantile Co-operative Financial institution Ltd., Dabhoi, which misplaced its licence in January 2024.

Aside from these states, UCBs in Rajasthan, Assam, Odisha, Andhra Pradesh, Telangana, West Bengal, Goa, Madhya Pradesh and Kerala have additionally misplaced license over the past one decade.

The Union authorities in its reply in Rajya Sabha additionally said that RBI has applied a number of measures to broaden the operations and strengthen the monetary well being of cooperative banks together with City Cooperative Banks (UCBs). The steps embody elevated Housing Mortgage Limits for UCBs.

“RBI has mandated a phased strategy for City Cooperative Banks (UCBs) to adjust to a Precedence Sector Lending (PSL) goal of 75 per cent of adjusted web financial institution credit score (ANBC) or credit score equal quantity of off-balance sheet publicity (CEOBSE) by March 31, 2026. UCBs have to stick to prudential publicity limits of 15 per cent for a single borrower/celebration and 25 per cent for a gaggle of linked debtors/events, based mostly on their Tier-I capital. Moreover, at the least 50 per cent of their loans should be in quantities not exceeding ₹25 lakh or 0.2 per cent of Tier-capital, as much as a most of ₹1 crore per borrower/celebration,” it added.

The reply in Rajya Sabha additionally said that not one of the Rural Cooperative Banks viz. State Cooperative Banks (StCBs)/District Central Cooperative Banks (DCCBs) have been closed since 2014.