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RBI Approves Establishment of NUCFDC to Boost UCBs.

Banking & Finance | Dated: 31 Jan 2025

The Reserve Bank of India (RBI) has approved the establishment of the National Urban Co-operative Finance and Development Corporation (NUCFDC) as an Umbrella Organisation (UO) to boost Urban Co-operative Banks (UCBs) across India. It has also been approved to function as a Non-Banking Financial Company (NBFC).

🎯 Key Highlights:

  • - NUCFDC is required to provide capital support to UCBs as per regulations, guidelines, and terms and conditions. It will also offer secured credit lines on merits to UCBs to handle temporary liquidity mismatches and assist in refinancing UCBs against their loans. Additionally, NUCFDC will manage deposits and borrowings from UCBs and Financial Institutions (FIs).
  • - NUCFDC will provide non-fund based support to UCBs, focusing on investments and other necessary services to strengthen the functioning of UCBs.
  • - It will also offer training, consultancy, and Human Resource (HR) support to ensure UCBs are well-equipped to adapt to evolving regulatory and market demands.

💡 Other Important Facts:

  • (i) In February 2024, NUCFDC obtained registration from RBI after raising a paid-up capital of Rs 117.95 crore.
  • (ii) NUCFDC requires RBI approval to act as a Self-Regulatory Organisation (SRO) for UCBs, with functions prescribed by the RBI.
  • (iii) However, NUCFDC will receive this approval only if it attains a paid-up capital of Rs 300 crore within one year from the date of registration by RBI, i.e., by February 7, 2025.

📚 Test Your Knowledge:

Recently, which organization did the RBI approve to boost Urban Co-operative Banks (UCBs)?

Correct Answer: NUCFDC

🚀 Quick Recap:

About National Urban Co-operative Finance and Development Cooperation (NUCFDC)

  • Chairman : Jyotindra M. Mehta
  • CEO : Prabhat Chaturvedi