Recommendations on UCBs by RBI’s Expert Committee

Current Context: The Reserve Bank of India released the recommendations suggested by its expert committee on Urban Cooperative Banks (UCBs).

• The committee was headed by former Deputy Governor of RBI, N S Vishwanathan.
• The committee was asked to suggest measures to have faster rehabilitation of UCBs and to review various regulatory norms through amendments to the Banking Regulation Act 1949 in respect to UCBs.
• The committee suggested the 4-tier structure for UCBs in order to ease the regulatory process. The structure is divided on the basis of UCB’s capital availability and other factors. The 4 Tier structure is mentioned below:
• Tier 1: UCBs with deposits upto Rs 100 crore
• Tier 2: UCBs with deposits between Rs 100 crore- Rs 1000 crore
• Tier 3: UCBs with deposits between Rs 1000 crore- Rs 10,000 crore
• Tier 4: UCBs with deposits more than Rs 10,000 crore
• The expert committee also suggested different capital adequacy and regulatory norms for UCBs. It has been suggested that the minimum capital to risk-weighted asset ratio (CRAR) for Tier 1 UCBs will vary from 9% to 15%.
• The Committee suggested setting up an Umbrella Organisation (UO) with a minimum capital of Rs 300 crore with CRAR and regulatory norms as same as NBFCs. This will enable to raise funds from the market or on-lend it to member UCBs.
• Static Part: 
• HQ of RBI: Mumbai
• Governor of RBI: Shaktikanta Das

Questions: 

Q.1 RBI’s expert committee on Urban Cooperative Banks (UCBs) suggested recommendation of ____-tier structure for UCBs in order to ease the regulatory process?
a. 3
b. 4
c. 2
d. 5

Q.2 RBI’s expert committee on Urban Cooperative Banks (UCBs) suggested minimum capital to risk-weighted asset ratio (CRAR) for Tier 1 UCBs to vary from 9% to ___%?
a. 12%
b. 11%
c. 15%
d. 13%