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What is the minimum Net NPA requirement for an Urban

Q: Answer-What is the minimum Net NPA requirement for an Urban Co-operative Bank (UCB) to be classified as Fin...

The Reserve Bank of India RBI has prescribed a minimum Net NPA requirement of not more than 3 for UCBs to be classified as Financially Sound and Well Managed FSWM.

Co-operative Bank (UCB) to be classified as Financially Sound and Well Managed (FSWM)? Direction (11 to 13):- Read the following information to answer the questions below: Given the heterogeneity in the cooperative sector, a tiered regulatory framework was required to balance the spirit of mutuality and co-operation more prevalent in banks of smaller sizes and those with limited area of operation vis-à-vis the growth ambitions of the large-sized Urban Cooperative Banks to spread their area of operation and undertake more complex business activities. The Reserve Bank of India had constituted the Expert Committee on Urban Co-operative Banks to examine the issues in urban cooperative banking sector and to review regulatory/ supervisory approach for strengthening the sector. Based on the recommendations of the Expert Committee, RBI had released the Revised Regulatory Framework for Urban Co-operative Banks (UCBs) on July 19, 2022. Accordingly, it was decided to adopt a four-tiered regulatory framework, as against the then existing two-tiered framework, for categorization of UCBs. Going forward, this categorization would be used for differentiated regulatory prescriptions aimed at strengthening the financial soundness of the UCBs.

A Not more than 1%

B Not more than 2%

C Not more than 3%

D Not more than 4%

E Not more than 2.5%

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What is the minimum Net NPA requirement for an Urban

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