RBI permits UCBs to refund share capital to members

The RBI has determined to permit city co-operative banks (UCBs) to refund the worth of the share capital to their members.
“It has been decided in the interim to permit UCBs which maintain CRAR of 9 per cent or above to refund the value of share capital to their members or nominees or heirs of deceased members on demand,” the RBI mentioned in a round to UCBs. The Banking Regulation Act prohibits withdrawal or discount in share capital by UCBs except the RBI specifies the extent as much as which and the situations topic to which such withdrawal or discount might happen, RBI mentioned.
Union Road Transport & Highways and MSME Minister Nitin Gadkari had mentioned there shall be no pressured privatisation of co-operative banks to be able to bolster the co-operative sector.
Addressing the Loksatta Urban Co-operative Banking e-conclave on January 7, Gadkari mentioned as a consultant of the Centre and in addition as a consultant of the individuals, he would act as a bridge between the co-operative banks in Maharashtra and the Finance Ministry, RBI, NABARD and the state authorities. Gadkari had mentioned co-operative banks should compete with non-public banks to make an impression on lawmakers in Delhi. Gadkari added whereas privatisation of co-operative banks has been mentioned since 1996, neither the central authorities nor the RBI has ever forcefully imposed it on the banks. Parliament handed amendments to the Banking Regulation Act in September 2020, bringing co-operative banks underneath the RBI’s supervision.