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Cooperative Banking

Revised regulations for net worth, capital adequacy applicable to UCBs

The RBI has released a detailed revised regulatory framework with respect to net worth and capital adequacy for urban cooperative banks (UCBs). According to the guidelines, tier 1 UCBs operating in a single district shall have a minimum net worth of Rs 2 crore.

  • All other UCBs (of all tiers) shall have a minimum net worth of Rs 5 crore.

  • UCBs that currently do not meet the minimum net worth requirement, as above, shall achieve at least 50 percent of the applicable minimum net worth on or before March 31, 2026, and the entire stipulated minimum net worth on or before March 31, 2028.

  • Tier 1 UCBs shall maintain, as hitherto, a minimum capital to risk-weighted assets ratio (CRAR) of 9% of Risk Weighted Assets (RWAs) on an ongoing basis.

  • Tier 2 to 4 UCBs shall maintain a minimum CRAR of 12% of RWAs on an ongoing basis.

  • UCBs in Tier 2 to 4, which do not currently meet the revised CRAR of 12 percent of RWAs, shall achieve the CRAR of at least 10 percent by March 31, 2024, 11 percent by March 31, 2025, and 12 percent by March 31, 2026.

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