RBI proposes to bring cooperative banks with assets over Rs 500 cr under CRILC

Mumbai, December 5 () The Reserve Bank of India announced on Thursday a series of measures, including the incorporation of all urban cooperative banks (UCB) with an asset base of Rs 500 million and more in the framework of the CRILC reporting framework, a development that will help curb the type of fraud of PMC Bank.

The RBI has created a Central Deposit of Information on Large Credits (CRILC) of programmed commercial banks, financial institutions throughout India and certain non-bank financial companies with multiple objectives, which, among others, include strengthening external supervision and Early recognition of financial distress, according to the RBI Declaration on development policies and regulations.

In order to build a similar database of large loans granted by primary UCBs, it has been decided to incorporate such entities with assets of Rs 500 million or more in the framework of CRILC reports, he said.

Detailed instructions in this regard will be issued at the end of the month, he said.

In order to reduce the risk of concentration in UCB exposures and further strengthen their role in promoting financial inclusion, it is proposed to modify certain regulatory guidelines related to them.

The guidelines would relate mainly to exposure standards for individual and group/interconnected borrowers, the promotion of financial inclusion and priority sector loans, among others, he said.

These measures are expected to strengthen the resilience and sustainability of UCBs and protect the interest of depositors, he said.

An appropriate time frame will be provided for compliance with the revised standards. A draft circular proposing the above changes will be issued shortly to obtain comments from interested parties, he said.

The central bank has also prescribed a set of basic cybersecurity controls for UCB in October 2018.

In a more detailed examination, it was decided to prescribe a comprehensive cybersecurity framework for UCBs, as a gradual approach, based on their digital depth and their interconnection with the landscape of payment systems, the digital products they offer and risk assessment of cybersecurity, he said.

The framework would require the implementation of progressively stronger security measures based on the nature, variety and scale of banks' digital product offerings, he said.

Such measures would include, among others, the implementation of a specific email domain of the bank; periodic security evaluation of websites/public applications; strengthening of the cybersecurity incident notification mechanism; strengthening the governance framework; and creation of the Security Operations Center (SOC)), he said. This would reinforce cybersecurity preparation and ensure that UCBs that offer a range of payment services and greater penetration of information technology are on par with commercial banks to address cybersecurity threats, he added. DP HRS