Mumbai, Aug 5 (IANS) The Reserve Bank of India (RBI) on Wednesday announced measures to strengthen the cooperative banking sector and proposed a harmonised regulatory framework for interest rates on advances across all regulated entities to improve transparency in lending rates and enhance consumer protection.
RBI Governor Sanjay Malhotra made the announcements at the conclusion of the August Monetary Policy Committee (MPC) meeting.
As part of the measures for the cooperative banking sector, the RBI will issue draft guidelines for resuming the licensing of urban cooperative banks (UCBs), based on feedback received on its earlier discussion paper on the licensing framework.
Moreover, the central bank will also issue draft directions after undertaking a comprehensive review of the credit monitoring arrangement for rural cooperative banks, which was last revised in 2008.
Malhotra said the review takes into account the experience gained over the years as well as developments in the banking sector since the existing framework was put in place.
The proposed directions are aimed at updating the credit monitoring framework for rural cooperative banks in line with structural and regulatory changes in the sector over the past 18 years.
Separately, the RBI proposed to harmonise and standardise the regulatory framework governing interest rates on advances across all regulated entities. Malhotra stated that the RBI will issue draft guidelines for resuming urban cooperative bank licensing based on feedback from its earlier discussion paper on UCB licensing.
The move is aimed at improving transparency in lending rates, ensuring greater consistency in lending practices and strengthening consumer protection.
Earlier in the day, the RBI MPC kept the repo rate unchanged at 5.25 per cent. In terms of GDP, Malhotra pegged growth at 6.7 per cent for FY27 and CPI inflation projected at 5 per cent for FY27.
–IANS
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