A high level committee constituted by the RBI to look into more efficient working ways for the urban cooperative banking (UCB) sector has suggested more professional directors on board, said R Gandhi, Deputy Governor of RBI, Business Standard reports.
“Mr. Gandhi said the concept of board for management had earlier been recommended by the Malegam committee. The RBI has also insisted on professional directors on board , he said. .
Sources say the board has also suggested a roadmap on how the UCBs can convert themselves into a universal bank.
According to Mr. Gandhi, the Gross Non Performing Assets (NPA) of UCBs is less than 5% while Net NPA is at 3%, which puts them on a par with public sector banks.
UCBs are small community banks and have limited operations. They have their committed clientele. It is unlikely that if a payment bank or a small finance bank comes they will lose their business, sources claim.