As per the draft of the lending norms review for UCBs, the central bank is proposing to enhance individual loan limits and rationalise the definition of unsecured advances, enhance the individual loan limits of these loans and revise the aggregate ceiling for such advances.
Regulated entities, stakeholders, and members of the public can submit their feedback on the draft by March 4, 2026, the RBI said.
The central bank proposed to double the aggregate ceiling of unsecured advances to 20 per cent, from 10 per cent earlier of total assets, the RBI said in a release.
“Provided that additional unsecured advances above this prudential ceiling shall be permitted only in respect of priority sector eligible loans, subject to a monetary ceiling of Rs 50,000 per borrower,” RBI said.
Further, the lending limit to nominal members for purchase of consumer durables is also proposed to be enhanced to Rs 2.5 lakh per borrower, and the tenor and moratorium requirements for housing loans are proposed to be deregulated for Tier-3 and Tier-4 UCBs.
The RBI had announced the review of the lending norms for Urban Co-operative Bank in the February monetary policy. During the monetary policy announcement, RBI Governor Sanjay Malhotra had said to strengthen the managerial and technical capacity of the UCBs, the central bank will launch Mission-SAKSHAM (Sahakari Bank Kshamta Nirman).
“The mission intends to train over 1.4 lakh participants from UCBs,” Malhotra added.