Urban Cooperative Banks: Vishweshwar Sahakari Bank Gets Scheduled Status
Why in the news
RBI granted Scheduled Bank status to Pune-based Vishweshwar Sahakari Bank, an Urban Cooperative Bank. No UCB had received it for more than twenty years, which signals support for strong cooperative banks.
About UCBs
- Cooperative-model lenders that grew from credit societies pooling member funds for cheap local loans.
- They serve urban and semi-urban areas; rural cooperative banks serve rural ones.
- Formerly overseen by State Registrars (RCS) and the Central Registrar (CRCS); from 2020, all UCBs and multi-state cooperatives are under RBI.
Four tiers (RBI, 2021)
| Tier | Members |
|---|---|
| 1 | All unit UCBs, salary earners’ UCBs, deposits up to ₹100 crore |
| 2 | ₹100 crore to ₹1,000 crore |
| 3 | ₹1,000 crore to ₹10,000 crore |
| 4 | Above ₹10,000 crore |
RBI’s advice
- Better compliance, risk management, internal audit, asset-liability and liquidity planning.
- Boards with skilled professionals, diversity, set tenures and strong committees.
- No creative accounting; modern strategies; digital customer service.
What scheduled status brings
- RBI liquidity facilities at preferential rates and clearinghouse participation.
- Eligibility for government business and project lending.
- More credibility, institutional investors and cheaper funds.
Exam angle
- Bank in news: Vishweshwar Sahakari Bank, Pune.
- RBI supervision of UCBs: since 2020.