RBI orders urban cooperative banks to declare exposures above Rs 5 crore

The Reserve Bank of India has ordered major primary urban cooperative banks (UCBs) to report credit information on all borrowers that have aggregate exposures of Rs 5 crore or above. These will also include special mention accounts. This information will be stored in RBI's Central Repository of Information of Large Credits (CRILC).

The decision to include large exposures of primary UCBs in RBI's CRILC was taken during the bi-monthly monetary policy committee meeting held on December 5. In this meeting, the central bank had announced a slew of measures referring to urban cooperative banks in light of the irregularities at Punjab and Maharashtra Cooperative (PMC) Bank.

"Primary (Urban) Co-operative Banks (UCBs) having total assets of Rs 500 crore and above as on March 31 of the previous financial year shall report credit information, including classification of an account as Special Mention Account (SMA), on all borrowers having aggregate exposures of Rs 5 crore and above with them to Central Repository of Information on Large Credits (CRILC) maintained by the Reserve Bank," the central bank said in a notification on Friday.

The aggregate exposure will include all fund-based and non-fund-based exposure on the borrower, the RBI stated.

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In the beginning, the UCBs will have to submit CRILC report on quarterly basis with effect from December 31, 2019. Detailed operating instructions will be issued shortly by RBI's Department of Supervision, the central bank said.

"UCBs should take utmost care about data accuracy and integrity while submitting the information /data on large credit to RBI, failing which penal action as per the provisions of the Banking Regulation Act, 1949 may be taken," the RBI mentioned.

RBI has been extremely cautious on the front of cooperative banks after the Rs 6,300 crore fraud at PMC Bank came to light. The RBI had found out that the lender had allegedly created fictitious accounts to hide massive loans extended to the almost-bankrupt Housing Development and Infrastructure Ltd (HDIL).

According to the RBI, PMC Bank had masked problematic 44 loan accounts, including HDIL loan accounts, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

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The Economic Offences Wing (EOW) of the Mumbai Police filed its first charge sheet in the PMC Bank scam case on Friday, days after the ED charge sheet in the matter. The 32,959-page document has named PMC Bank's erstwhile chairman Waryam Singh, former managing director Joy Thomas, former director of the bank Surjit Singh Arora, along with HDIL promoters Rakesh Wadhawan and Sarang Wadhawan.