Neeraj Nigam, the Chief General Manager of RBI has written letters to the Chief Executive Officers of Urban Co-operative Banks, asking them to go in for System-based asset classification.
“In order to improve the efficiency, transparency and integrity of the asset classification process, it has been decided to implement system-based asset classification in urban co-operative banks (UCBs)”, Nigam writes.
The letter says that the UCBs having total assets of Rs 2000 crore or above as on March 31, 2020 shall implement system-based asset classification with effect from June 30, 2021.
UCBs having total assets of Rs 1000 crore or above but less than Rs 2000 crore as on March 31, 2020 and having self-assessed themselves as being under Level III or Level IV in terms of the Comprehensive Cyber Security Framework shall implement system-based asset classification with effect from September 30, 2021, it adds.
UCBs which meet the above criteria as at the end of the current or subsequent financial years shall implement system-based asset classification within a period of six months from the end of the financial year concerned, stated the Circular.
For smooth implementation of the system, all concerned UCBs may conduct pilot/parallel run and evaluate the results for accuracy/integrity of the asset classification in compliance with the applicable RBI instructions so as to ensure that they are ready for implementation of the system-based asset classification from the appointed date, RBI underlines.
UCBs not meeting the above criteria are also encouraged to voluntarily implement the system-based asset classification in their own interest, it concludes.
