M. R. Venkatesh, Chairman of Thyagaraja Cooperative Bank, has urged the Reserve Bank of India to provide greater flexibility to Urban Cooperative Banks (UCBs) in meeting Priority Sector Lending (PSL) targets.
Addressing the 50th AGM of NAFCUB in New Delhi, Venkatesh said a large number of UCBs operate in metropolitan cities, making it difficult for them to achieve PSL targets, particularly in agriculture. He called for suitable relaxation in PSL norms for urban-focused banks.
Venkatesh also sought an increase in the Rs 50 lakh housing loan limit applicable for priority sector classification. He pointed out that the RBI has raised the non-priority housing loan limit from Rs 70 lakh to Rs 1.40 crore, while the PSL limit remains unchanged.
He further suggested retaining the earlier 40% PSL target instead of the current 60% requirement.
On deposit insurance, Venkatesh urged enhanced DICGC coverage for senior citizens, suggesting that their entire deposit amount should be covered instead of the existing Rs 5 lakh limit.
