RBI tells urban cooperative banks to report credits of ₹5 crore and above every quarter

The Reserve Bank of India (RBI) on Thursday said urban cooperative banks need to report exposures of 5 crore and above to a central repository within a month of a quarter-end.

“The banks need to submit the data on large exposures within 30 days from the end of the quarter through XBRL reporting platform of RBI. Banks may put in place appropriate systems to be in readiness to submit the return on a more frequent periodicity,” said RBI.

The central bank said that reports filed by cooperative banks will comprise three sections, namely, exposure to large borrowers, reporting of technically or prudentially written-off accounts and reporting of balance in current account.

“Banks are advised to take utmost care about data accuracy and integrity while submitting the data on large credits to the Reserve Bank of India, failing which penal action would be undertaken,” the central bank said.

Bringing cooperative banks closer to the reporting standards of commercial banks, RBI on 27 December mandated them to report credit information, including classification of an account as special mention account (SMA) to the central repository of information on large credits (CRILC). Special mention accounts (SMA) are accounts exhibiting signs of incipient stress resulting in the borrower defaulting in timely servicing of debt obligations, although the account has not yet been classified as non-performing.

On 5 December, the central bank had announced a slew of measures related to urban cooperative banks (UCBs), including exposure norms, a credit repository and cybersecurity norms. The CRILC database is used by banks and other financial institutions to share, among themselves and with RBI, the classification status of borrowers.

RBI has also restricted urban cooperative banks from offering large corporate loans through several changes to lending norms last month. The regulator slashed single and connected borrower exposure for UCBs, hiked the priority sector lending (PSL) target and specified a portfolio mix for at least half of their loan books.

The regulator has been, over the last couple of months, strengthening the oversight of cooperative banks following the Punjab and Maharashtra Cooperative (PMC) Bank Ltd crisis last year. On 24 September, 2019, RBI put severe curbs on PMC Bank, including on cash withdrawals, amid a probe into accounting lapses. Cash withdrawals were capped at 1,000 per account for six months, but subsequently relaxed to 50,000. The restrictions under Section 35A of the Banking Regulation Act were aimed at preventing a run on the bank that could end up endangering the stability of the entire financial system because of a contagion effect. The PMC Bank case showed how the bank had disbursed most of its loans to a single borrower group.

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