RBI plans to tighten loan norms for co-op banks

In an effort to avoid frauds like the one seen in PMC Bank, the Reserve Bank of India (RBI) on Monday proposed to tighten lending rules for urban co-operative banks (UCBs). The regulator plans to limit these lenders’ exposure to a single party and a group of related borrowers to 10% and 25%, respectively, of their Tier I capital — down from the 15% and 40% level now.

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