Financial Daily from THE HINDU group of publications
Friday, Oct 22, 2004
Financial Daily from THE HINDU group of publications Friday, Oct 22, 2004 |
||
|
|
||
|
Money & Banking
-
Co-operatives Keep interest rates in line with market trends, RBI tells UCBs Our Bureau
Mumbai , Oct. 21 URBAN co-operative banks must ensure that the interest rates they offer on deposits are in line with the market trends, as per the Reserve Bank of India's best practices code for UCBs. Banks must comply with the CRR and SLR requirements, maintain a reasonable credit-deposit ratio and sanction loans within exposure norms, RBI has said in a circular issued to UCBs. Aside from framing a well-documented Investment Policy, investments in government and approved trustee securities must be as prescribed by RBI. UCBs must also frame documented loan policies and have sound credit appraisal on well-settled banking norms. The emphasis should be on the reduction in gross NPAs rather than the net NPAs, the apex bank said. Recovery efforts on dues should start from the first month of default itself and position of overdue accounts should be reviewed on a weekly basis to arrest slippage of fresh accounts to the NPA category. UCBs have been advised to install internal credit rating systems for borrowers enjoying fund based credit facilities of Rs 10lakh and above for objective credit pricing on an on-going basis. RBI has said that UCBs must not seek to open new branches as a matter of routine. The focus should be on expenditure control and maximisation of profit. Banks must not fritter away gains by declaring unsustainably high levels of dividend and could make efforts to increase their fee-based income by rendering efficient and prompt customer service such as issue of DDs etc. Banks have been advised that they should have periodic meetings with customers at the branch level for obtaining feed back on the deficiency, if any, in banking services and provide services to suit the requirement of the customers, such as keeping the branch open on all the days of the week or staggering the banking hours. UCBs should also institute a system of internal audit and inspection apart from statutory audit. Prompt follow-up action should be taken on the reports. The accountability of the Branch Manager and concerned staff should be put in place, according to RBI. The Board of Directors should put in place a system of fixing annual targets for the branches with half-yearly reviews of their performances.
More Stories on : Co-operatives | Interest Rates
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|