RBI allows Co-operative banks to convert into small finance lenders

Mumbai, June 7 (KNN) Urban Co-operative Banks (UCBs) can now voluntarily convert themselves into Small Finance Banks (SFBs) after fulfilling certain criteria, said RBI.

The Reserve Bank of India (RBI) has opened the doors for urban co-operative banks (UCBs) to convert into small finance banks giving them freer access to branches and opening up a larger market for these lenders which are so far local in nature. 

The High Powered Committee on Urban Cooperative Banks (UCB), chaired by R. Gandhi, the then Deputy Governor of Reserve Bank, had, inter alia, recommended the voluntary conversion of large Multi -State UCBs into Joint Stock Companies and other  UCBs which meet certain criteria into SFBs.

Taking these recommendations into consideration, it has been decided to allow voluntary transition of UCBs meeting the prescribed criteria into SFBs.

The detailed scheme will be announced separately, RBI said in its post policy developmental and regulatory announcements.