RBI proposes to double unsecured advances limit for Urban Co-operative Bank
The Reserve Bank of India (RBI) has proposed to double the aggregate ceiling of unsecured advances by the Urban Co-operative Bank (UCBs) to 20% of total assets from earlier 10%. Further, it has proposed to enhance individual loan limits and rationalise the definition of unsecured advances, enhance the individual loan limits of these loans.
For the priority sector, the additional unsecured advances above this prudential ceiling shall be permitted, given by a monetary ceiling of Rs 50,000 per borrower. Moreover, the lending limit to nominal members for purchase of consumer durables is proposed to be enhanced to Rs 2.5 lakh per borrower, and the tenor and moratorium requirements for housing loans are proposed to be deregulated for Tier-3 and Tier-4 UCBs.
The RBI had announced the review of the lending norms for UCBs in the February monetary policy. During the monetary policy announcement, RBI Governor Sanjay Malhotra had said that to strengthen the managerial and technical capacity of the UCBs, the central bank will launch Mission-SAKSHAM (Sahakari Bank Kshamta Nirman). The mission intends to train over 1.4 lakh participants from UCBs.
