Urban Coop Banks Should Become Small-finance Banks

Civilservices chronicle The report said that scheduled UCBs (SUCBs) were com-parable with small finance banks (SFBs) in terms of net worth and gross loans and advances as of March-end 2018. In keeping with the fast-paced changes in the banking space and in order to facilitate growth, the RBI, in September 2018, civil services chroniclemagazine-latest announced a scheme for voluntary transition of UCBs into SFBs.This is aimed as a step forward to provide a full suite of products/services, sustain competition, raise capital, etc. Accordingly, this scheme has been introduced for volun-tary transition of a UCB into an SFB by way of transfer of assets and liabilities. Civilservices chronicle UCBs with a minimum net worth of Rs 50 crore and a CRAR (credit to risk-weighted assets ratio) of 9 per cent and above are eligible for the voluntary transition.Upon commencement of business, the converted entity must have a minimum net worth of Rs 100 crore, and the promoters should hold at least 26 per cent of the paid-up equity capital civil services chroniclemagazine-latest