The Reserve Bank of India has advised the Urban Co-operative banks to take good care of their financial heath. The apex bank has warned them, if they fail to do so, it can lead to the cancellation of their licenses. They must make sure that the deposits do not fall below 25%.The RBI said, "The management of the bank should identify the cause of deterioration and take necessary corrective actions on its own, with a view to improving the financial position of the bank."
It also said, "The corrective action should include measures for augmenting capital, close monitoring of NPAs and their recovery especially the large NPAs, improving profitability by curtailing expenses, mobilising low-cost deposits, etc, depending on the nature of the deficiency.""The UCBs should also prepare time-bound specific action plan for bringing about necessary improvement in their functioning and the board of directors should monitor the progress in implementation of the action plan in every meeting of the board," the RBI said.