Why is the RBI governor concerned about urban cooperative banks?
UCBs' governance and performance metrics have long been on the RBI's radar. The 2019 downfall of the Punjab and Maharashtra Cooperative Bank intensified the scrutiny on the urban cooperative banking system.
Reserve Bank of India (RBI) governor Shaktikanta Das recently expressed concern over high gross non-performing assets (GNPA) ratio of 8.7% in urban cooperative banks (UCBs). Das emphasized the urgent need for these institutions to improve governance standards and focus on credit risks. Mint takes a look at the significance of UCBs and the central bank's initiatives to fortify these banks.