Mumbai, Aug 12 (SocialNews.XYZ) The Reserve Bank has asked urban co-operative banks to implement system-based asset classification.
The move is expected to improve the efficiency, transparency and integrity of the current asset classification system in UCBs.
Accordingly, system-based asset classification is a better process to reflect a bank's actual financial health in its balance sheet.
The RBI on Wednesday said that UCBs having total assets of Rs 2,000 crore or above as on March 31, 2020 shall implement system-based asset classification with effect from June 30, 2021.
"UCBs having total assets of Rs 1,000 crore or above but less than Rs 2,000 crore as on March 31, 2020 and having self-assessed themselves as being under 'Level III or Level IV' ... on Comprehensive Cyber Security Framework for UCBs shall implement system-based asset classification with effect from September 30, 2021."
As per RBI, for smooth implementation of the system: "All concerned UCBs may conduct pilot or parallel run and evaluate the results for accuracy or integrity of the asset classification in compliance with the applicable RBI instructions so as to ensure that they are ready for implementation of the system-based asset classification from the appointed date."
"UCBs not meeting the above criteria are also encouraged to voluntarily implement the system-based asset classification in their own interest," RBI said.
Source: IANS
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