RBI asks urban co-operative banks not to lend to govt entities

The Reserve Bank of India (RBI) adviced urban co-operative banks (UCBs) on Wednesday to refrain from giving large loans to public sector or government entities, saying these transactions go against the core functions of these lenders.

RBI defined UCBS as needing to provide loans to lower and middle income groups, as well as agriculture and small businesses, instead of government-owned companies, which are called public sector undertakings (PSUs) in India.

"Grant of high value loans to PSUs is not consistent with the co-operative principles and dilutes the cooperative character of UCBs," the RBI said.

"In view of the above, UCBs are advised, as a matter of principle, generally not to grant large value loans to Public Sector/Government Undertakings."

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • For those who are left to survive a war-torn world, let there be peace

    The hunger games have begun, and they have started reaping our children. There is no way around it.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Shifting sands in the Far East

As was to be expected, Japanese prime minister Shinzo Abe ...

Zehra Naqvi

When humanity died, bestiality prevailed

The terrorist attack that killed 132 children in Peshawar has ...

Bubbles Sabharwal

Why self-esteem must be your best friend forever

Two negatives do make a positive! Imagine no doubts, no ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture