Discussion Paper on Capital Raising Avenues for Primary (Urban) Co-operative Banks will be issued
FinTech BizNews Service
Mumbai, 9 October, 2024: The initial set of guidelines on issue and regulation of share capital and securities for Primary (Urban) Co-operative Banks (UCBs) to ensure alignment with the Banking Regulation (Amendment) Act, 2020 were issued in 2022. However, these guidelines did not cover the newly enabled capital related provisions such as issuance of special shares, issuance of shares at a premium, etc., which are new to co-operative banking sector. The Report of the Expert Committee on Primary (Urban) Co-operative Banks chaired by Shri. N.S. Vishwanathan, former Deputy Governor, RBI, had provided broad guiding principles through its recommendations on these provisions.
A Working Group was constituted in RBI to further operationalise the broad-based recommendations of the Expert Committee on the newly enabled capital related provisions. “Based on the recommendations of the Working Group, a Discussion Paper on Capital Raising Avenues for Primary (Urban) Co-operative Banks will be issued for eliciting feedback and suggestions from stakeholders,” said Shaktikanta Das, Governor, Reserve Bank of India, while announcing the decisions of the MPC on Wednesday.
Prabhat Chaturvedi, CEO, National Urban Co-operative Finance and Development Corporation (NUCFDC) – Umbrella Organization for UCB, has shared important insights on today’s RBI announcement about Discussion papers for UCBs:
“Today's RBI announcement to issue a discussion paper on capital-raising avenues for Urban Co-operative Banks is a positive step. The regulator is focused to make the UCBs an integral part of the Indian financial ecosystem, boost their competitiveness and maximize their capacity to serve their customers. Focusing on capital-raising options is vital for the stability and growth of these institutions. This discussion paper will be instrumental in actively engaging with UCBs and supporting them with measures necessary for their development”.
