The Reserve Bank of India has made it simpler for urban cooperative banks to deploy offsite ATMs. Banks with relatively few bad loans, three continuous years of profit and industry professionals on their boards would not require central bank approval to deploy the machines, a central bank official tells PaymentsSource.
Previously, urban cooperative banks required central bank approval after showing they had profits for the three preceding years, their net nonperforming assets represented less than 10% of outstanding loans and they maintained a minimum prescribed adequacy ratio of
Under the new regulations, the banks can deploy their ATMs without any approval if their net nonperforming assets are below 5% of their outstanding loans and at least two industry professionals are on their boards. They also cannot have defaulted on meeting a required cash-reserve ratio, and their capital-adequacy ratio cannot have fallen below 10% in the preceding year.
Urban cooperative banks primarily operate in urban and semi-urban areas and specialize in lending to small borrowers and businesses. Some of these banks eventually want to become commercial banks, and an ATM infrastructure is one of the nonmandatory requirements when regulators evaluate their plans.
