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| J&K signs MOU with RBI | | | Early Times Report
Jammu, Dec 24-Reserve Bank of India (RBI) today signed an agreement with Jammu and government ushering in a new era in cooperative banking sector, paving way for all round growth and development of UCBs in the state. Jammu and Kashmir is the 27th state Government to have entered into a Memorandum of Understanding with RBI.
The MoU is a working arrangement between the RBI and the state government to ensure that the difficulties arising from duality of control over UCBs are suitably addressed and resolved. In terms of the MoU, Reserve Bank undertakes to constitute a state level task force for urban co-operative banks (TAFCUB) with representative from Reserve Bank, State Government and the sector for identification and drawing up of a time bound action plan for revival of potentially viable UCBs and providing non- disruptive exit route for non-viable UCBs. The MoU also seeks to encourage and facilitate human resources development and IT initiatives in UCBs. Under the MoU, the state government undertakes to introduce for statutory audit and modify audit rating models so as to align the same with the gradation system adopted by the Reserve Bank for all UCBs. The MoU also provide for statutory audit by chartered accountants (CAs) for UCBs with deposite over Rs 25 crore and special audit by CAs.
The UCBs are presently subjected to dual control, with the Register, Co-operative Societies and Reserve Bank of India acting as co-regulators. It may be recalled that in the mid-term review of annual policy announced in October 2004, the Reserve Bank had announced that a vision document for UCBs would be prepared. In March 2005, recognizing the systemic risks, duality of control that impedes supervisory efforts and keeping in view the needs of its clientele, Reserve Bank reviewed the entire gamut of legislative, regulatory and supervisory framework. |
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