RBI sees red over NPAs in co-op banks
Asks them to improve loans recovery, focus on governance and risk management
image for illustrative purpose
Mumbai: RBI Governor Shaktikanta Das on Monday said the central bank is not comfortable with the gross non-performing assets (GNPAs) ratio of 8.7 per cent in urban co-operative banks (UCBs) and asked them to work towards improving the same.
Addressing directors of UCBs in the financial capital at an RBI-organised conference, Das urged that such lenders should improve the governance standards, avoid related-party transactions and focus on credit risks, among others.
It can be noted that the UCB sector has been fraught with multiple challenges and also witnessed difficult times in the recent past, like the implosion of the city-headquartered Punjab and Maharashtra Bank.
Das reminded the directors of the UCBs that banks run on depositors and added that protection of the hard-earned money pooled in from the middle class, poor and retirees is far more sacred than going to a temple or a gurdwara. While the overall picture at an aggregate level looks nice, the situation on GNPAs and capital adequacy is not at all satisfactory, Das said.
He said the overall GNPAs have improved to 8.7 per cent, which is not a good number. It is not a comfortable number even at an aggregate level.
