Four-tiered regulatory for Urban Cooperative Banks

• On July 19, 2022, a simple four-tiered regulatory framework was adopted by the Central Bank, for Urban Co-operative Banks (UCBs).

• The RBI adopted the framework on the basis of size of deposits.

• This move is aimed at strengthening their financial soundness.

• Simple four-tiered regulatory framework has been adopted, with differentiated regulatory prescriptions.

• Minimum net worth of Rs 2 crore has been specified for Tier 1 UCBs operational in single district and Rs 5 crore has been specified for all other UCBs (across all tiers).