Latest news with #UCBs
Time of India
23-05-2025
- Business
- Time of India
'Allow Urban Co-op Banks to issue share certificates'
MUMBAI: To strengthen Urban Co-operative Banks (UCBs), a discussion paper by the Reserve Bank has proposed to allow them, especially larger ones, to issue 'Special Share Certificates' (SSCs) that can be counted as core capital but won't have voting rights. They can be traded on the bank's website or, eventually, stock exchanges to attract more investors. The paper suggests permitting UCBs to offer loans to Perpetual Non-cumulative Preference Shares (PNCPS) investors, up to certain limits, to make these investment options more appealing. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
22-05-2025
- Business
- Business Standard
RBI moots special shares for UCBs as new source to raise capital
The Reserve Bank of India (RBI) has mooted a proposal for urban co-operative banks (UCBs) with deposits of more than Rs 10,000 crore to issue Special Share Certificates (SSCs) to their members or to persons residing within their area of operations. This will offer an additional avenue for raising capital, alongside the existing arrangement for issuing member shares. These special shares are to be issued at book value and would carry the same face value as member shares. However, SSCs shall be issued without voting rights and will not confer any form of membership rights on investors, according to the RBI's discussion paper on capital-raising avenues for UCBs. The RBI noted that a system of dual-class shares in co-operative institutions is well established internationally. It also pointed out that amendments to the Banking Regulation Act made in 2020 contain enabling provisions for the issuance of such special shares. The premium—defined as the difference between the face value and the book value—received on SSCs may be transferred to a 'Special Shares Premium Account'. This account may be disclosed under 'Reserve Fund and Other Reserves', the RBI added. The outstanding amount of SSCs (excluding premium), along with the outstanding amount of Perpetual Non-Cumulative Preference Shares (PNCPS) and Perpetual Debt Instruments (PDIs), should not exceed 35 per cent of the total Tier I capital at any point in time. The board of directors of the UCB will be empowered to determine the amount of SSCs to be raised by the bank. UCBs will be required to submit the offer document to the RBI—including all necessary details and disclosures regarding SSCs—at least one month prior to the issuance date.
Yahoo
24-02-2025
- Business
- Yahoo
India's central bank relaxes certain norms for urban co-operative banks
MUMBAI (Reuters) - India's central bank on Monday revised certain norms for urban co-operative banks (UCBs), with a view of providing them with greater operational flexibility, while meeting regulatory objectives. UCBs are financial institutions operating in urban and semi-urban areas, offering banking services to small borrowers, micro-businesses, and lower-income groups. UCBs can now classify loans up to 2.5 million rupees ($28,842.71) or 0.4% of Tier I capital, whichever is higher, as small-value loans, subject to a ceiling of 30 million rupees per borrower, the Reserve Bank of India said. Prior to the amendments, UCBs could classify loans up to 2.5 million rupees or 0.2% of Tier I capital as small-value loans, subject to a ceiling of 10 million rupees per borrower. The RBI has also increased the aggregate exposure limit for residential mortgages to 25% of its total loans and advances. Exposure of UCBs to the real estate sector, excluding housing loans, is capped at 5%, the RBI said. Additionally, the RBI has revised the individual housing loan limits for different tiers of UCBs. The new limits range from 6 million rupees to 30 million rupees. The RBI has also extended the glide path for provisioning requirements for investment in security receipts by two years until 2027-28. These revised norms are effective immediately, the RBI said. ($1 = 86.6770 Indian rupees) Sign in to access your portfolio
Reuters
24-02-2025
- Business
- Reuters
India's central bank relaxes certain norms for urban co-operative banks
MUMBAI, Feb 24 (Reuters) - India's central bank on Monday revised certain norms for urban co-operative banks (UCBs), with a view of providing them with greater operational flexibility, while meeting regulatory objectives. UCBs are financial institutions operating in urban and semi-urban areas, offering banking services to small borrowers, micro-businesses, and lower-income groups. UCBs can now classify loans up to 2.5 million rupees ($28,842.71) or 0.4% of Tier I capital, whichever is higher, as small-value loans, subject to a ceiling of 30 million rupees per borrower, the Reserve Bank of India said. Prior to the amendments, UCBs could classify loans up to 2.5 million rupees or 0.2% of Tier I capital as small-value loans, subject to a ceiling of 10 million rupees per borrower. The RBI has also increased the aggregate exposure limit for residential mortgages to 25% of its total loans and advances. Exposure of UCBs to the real estate sector, excluding housing loans, is capped at 5%, the RBI said. Additionally, the RBI has revised the individual housing loan limits for different tiers of UCBs. The new limits range from 6 million rupees to 30 million rupees. The RBI has also extended the glide path for provisioning requirements for investment in security receipts by two years until 2027-28. These revised norms are effective immediately, the RBI said. ($1 = 86.6770 Indian rupees)
