A central bank panel suggested a professionally-managed national-level Umbrella Organisation (UO), which would provide urban cooperative banks (UCBs) a range of services on the same lines as is done by UOs for credit unions in several countries.
Its authorised capital will be Rs. 200 crore and start-up paid-up capital Rs. 100 crore. The paid-up capital could be called up in two or more instalments depending on the need and response. The Reserve Bank of India (RBI) released the report of the Working Group on Umbrella Organisation and Constitution of Revival Fund for Urban Cooperative Banks (UCBs) on Tuesday.
The capital will be contributed by the UCBs voluntarily at 10 paise per Rs. 100 of assets or such rate as may be necessary. The governments may consider providing suitable fiscal incentives to UCBs for contributing to the share capital of the UO. The panel recommended a one-time uniform membership fee of Rs. 1 lakh per member UCB, which will reside in a reserve fund. These services are: Offering credit facilities; providing liquidity to meet short term mismatches; fund management services; investment banking services; payment and settlement services/gateway; IT services; ATM network and services; management consultancy; and capacity building services.
In states where the presence of UCBs is small and it is not viable to set up such a facility, UCBs could affiliate themselves with another State that offers such a facility.
RBI also stated that comments and suggestions on the recommendations of the Working Group would be sent to the Chief General Manager-in-charge, Urban Banks Department, Reserve Bank of India, Central Office, 1st Floor, Garment House, Worli, Mumbai-400 018 or sent through fax 022 24974030 / 24920231 or e-mailed within one month from November 17.