RBI will soon come out with guidelines for raising long term capital by Urban Cooperative Banks (UCBs), said RBI Deputy Governor Usha Thorat here on Thursday. 

She said the apex bank had set up a working group to examine avenues other than share capital and retained earnings that are the two sources to raise capital for UCBs, and the working group’s report is under examination. 

Speaking at the national seminar on ‘Challenges, Opportunities & Prospects to Urban Cooperative Banks,” Ms Torat said though small depositors are paid off by the deposit insurance and credit guarantee corporation in case of liquidation, there is considerable delay in submission of claims and this is adversely affecting the depositor’s interest. She pointed out that there are 11 cases of banks under liquidation where payment of claims has not been possible for want of the claim list.

Improvements
The liquidation process, she said, needs to be professionalised and they are in dialogue with state governments through Taskforce for Urban Cooperative Banks (TAFCUB). She said there are visible improvements in this sector in Karnataka. She said while in 2005 Karnataka had 158 UCBs in grades III and IV, it now has only 97 banks in these grades. She informed that Karnataka has the second largest number of UCBs in India and the cooperative movement also has completed hundred years.