The Hindu Business Line : RBI eases branch norms for urban co-op banks

Mumbai, July 4 Urban co-operative banks (UCBs) with a capital adequacy ratio not less than 9 per cent and with net non-performing assets (NPA) below 10 per cent can now open new branches and extension counters (EC).

The banks will also be required to fulfil certain other eligibility criteria for opening of new branch and extension counters, according to Reserve Bank of India notification.

“Banks satisfying the above mentioned conditions would be eligible for additional branches/ECs not exceeding 10 per cent of their existing branch network, over a period of two years,” said the notification.

The banks should not have defaulted in maintenance of cash reserve ratio and statutory liquidity ratio in the preceding financial year.

Average net worth

The bank should have also made a net profit in the financial year just ended and its net worth should not be less than Rs 10 crore. “The average networth per branch including the additional centres for which licences are sought, should not be less than Rs 2 crore per branch in A and B centres and Rs 1 crore in C and D centres,” the notification added. For this purpose, the extension counters will also be treated as branches.

The bank should be registered under the Cooperative Societies Act of the States that have signed memorandum of understanding with Reserve Bank of India or under the Multi State Co-operative Societies Act, 2002. The bank should be licensed and have an elected board of directors with at least two professionals in it, said the notification.

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