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To what percentage has RBI increased the minimum capital adequacy ratio (CAR) of Urban Cooperative Banks (UCBs)?

Correct Answer : Option (B) - 12%

The Reserve Bank of India has hiked the minimum capital adequacy ratio (CAR) for Urban Cooperative Banks (UCBs) with deposits above Rs 100 crore to "12 per cent" from the earlier floor of 9.0 per cent.
It has provided a glide path till March 2026 to meet revised CAR norm in phases for UCBs that don't meet it currently.
It has retained the norm of a minimum CAR of 9 per cent for tier-1 banks (those with deposits up to Rs 100 crore).
RBI in a statement said it has decided to adopt a simple four-tiered regulatory framework with differentiated regulatory prescriptions to strengthen the financial soundness of the existing UCBs. This is based on recommendations of a panel headed by N S Vishwanathan, former Deputy Governor set up in February 2021.
According to the data reported by the banks as on March 31, 2021, most UCBs have a CRAR of more than 12 per cent (1,274 lenders out of 1,534).
The Tier-2 banks are UCBs with deposits of more than Rs 100 crore and up to Rs 1,000 crore; Tier-3 are UCBs with deposits of more than Rs 1,000 crore and up to Rs 10,000 crore. The final layer, Tier-4. consists of banks with deposits exceeding Rs 10,000 crore..

Source : Business Standard

Published On : July 21, 2022
Category : Banking