Who: Uniform Guidelines on Internet Banking for Cooperative Banks
What: Issued by RBI
When: 5 November 2015
Reserve Bank of India (RBI) on 5 November 2015 issued revised and uniform guidelines on Internet Banking for all licensed cooperative banks including Urban Cooperative Banks (UCBs), Cooperative Banks (StCBs) and Districts Co-operative Banks (DCBs).
These guidelines relate to Internet Banking (View Only) facility and Internet Banking with Transaction facility.
Revised guidelines for Internet Banking (View Only) facility
• All licensed StCBs, DCCBs and UCBs which have implemented Core Banking Solution (CBS) and migrated to Internet Protocol Version 6 (IPv6) may offer Internet Banking (View only) facility to their customers, without prior approval of RBI.
• In case, any service offered under ‘view only’ facility requires two-factor authentication or One Time Password (OTP), banks may adopt the security features related to internet banking as prescribed by RBI, as appropriate to such services.
• The cooperative banks offering this facility to their customers should ensure that the facility is strictly for non-transactional services such as balance enquiry and balance viewing among others.
• The cooperative banks have to report commencement of the service to the concerned Regional Office of RBI (and also NABARD in case of StCBs/DCCBs) within one month of operationalisation of this facility.
Earlier in 2014, only Urban Cooperative Banks (UCBs) were permitted to offer this facility to their customers.
Revised guidelines for Internet Banking with Transaction facility
Only those licensed StCBs, DCCBs and UCBs, which have implemented CBS and have also migrated to IPv6 can offer this facility to their customers with prior approval of RBI if they fulfill the following criteria:
• Credit to Risk Adequacy Ratio (CRAR) of not less than 10 per cent
• Net worth is 50 crore rupees or more as on 31 March of the immediate preceding financial year
• Gross Non-Performing Assets (NPAs) less than 7 % and Net NPAs not more than 3%
• The bank should have made a net profit in the immediate preceding financial year and overall, should have made net profit at least in three out of the preceding four financial years.
• It should not have defaulted in maintenance of Cash Reserve Ratio (CRR)/Statutory Liquidity Ratio (SLR) during the immediate preceding financial year.
• It has sound internal control system with at least two professional directors on the Board.
• The bank has a track record of regulatory compliance and no monetary penalty has been imposed on the bank for violation of RBI directives/guidelines during the two financial years, preceding the year in which the application is made.