The Reserve Bank of India (RBI) has asked all urban co-operative banks to ensure that their loan policy is reviewed by the Board at least once in a financial year.

This directive is aimed at ensuring that the loan policy reflects the approved internal risk appetite and remains in alignment with the extant regulations, said the central bank in a statement.

According to the RBI’s Master Directions (April 8) on management of advances, UCBs are required to lay down, with the approval of their boards, transparent policies and guidelines for credit dispensation, in respect of each broad category of economic activity, keeping in view the credit exposure norms and various other guidelines issued by Reserve Bank from time to time.