Financial Daily from THE HINDU group of publications
Wednesday, Aug 04, 2004
Financial Daily from THE HINDU group of publications Wednesday, Aug 04, 2004 |
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Money & Banking
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Co-operatives Current a/c in urban co-ops gets tougher Our Bureau
Mumbai , Aug 3 THE Reserve Bank of India has said that while opening a current account in urban co-operative banks (UCBs), customers will have to furnish a declaration that they are not enjoying any credit facility from any other commercial bank. If the customers have a relationship with another bank where they are availing credit, they must declare this with particulars. In a circular to the chiefs of all UCBs, the apex bank has said, "It has been brought to our notice that some borrowers open current accounts with banks other than the lending bank, with a view to overcoming credit discipline that is imposed on them by the lending bank. They usually resort to this practice when their loan accounts turn irregular and they do not intend to deposit receipts into the loan accounts for regularising them". Keeping in view the importance of credit discipline for reduction in NPA level of banks, UCBs have been advised to ascertain whether the customer is a member of any other co-operative society or bank; if so, the full details such as name of the society or bank, number of shares held, details of credit facilities, such as nature, quantum, outstanding and due dates mustbe furnished. The RBI has said that in case the customer is already enjoying any credit facility from any other commercial or co-operative bank, the bank, where the customer is opening the current account, should duly inform the concerned lending bank and also specifically insist on obtaining a no-objection certificate from them.
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