benefit of coordinated deliberations on their future set - up, by both regulators / supervisors. in such states, reserve bank directly initiates supervisory action as per a graded supervisory action framework, which suggests specific and objective course of action for the banks that are in different stages of weakness. in keeping with the consultative process initiated with the state governments, the reserve bank has sought to extend the arrangement to the ucbs functioning in more than one state, through a mou with the central registrar and enlarging the scope of the tafcubs to cover the scheduled ucbs, which are systemically even more significant. further, the consultative approach is sought to be extended to the liquidation stage to facilitate early lodging and settlement of insurance claims. arsing out of the comfort of coordinated supervision / regulation of banks in the states that have signed the mou, certain facilities have been extended to the banks in such states. requests from eligible banks in such states for additional business opportunities, like setting up currency chests, selling mutual funds, providing forex services, opening of new atms etc. are also considered. strengthening of regulatory / supervisory framework the rbi recognized that there is a need to mitigate the risk to which the system is exposed by providing a regulatory and supervisory framework that will appropriately address the problems of the sector as also the shortcomings of dual control. significant features of the current regulatory / supervisory framework are outlined below. dispensing with the one - size - fits - all approach in order to achieve the objectives set out in the vision document, reserve bank of india is implementing a two - tiered regulatory and supervisory regime. banks with deposits under rs. 100 crore and whose operations are limited to a single district, are considered to be more closely epitomizing the spirit of cooperative banking and as such are placed under simplified regulations to enable them to gradually gain in strength, such that, over a period of 3 years they can be brought at par with all other banks in term of performance, strength and regulatory prescriptions. as a step in this direction, recently reserve bank of india has allowed the smaller banks to adopt 180 days delinquency norms for classification of assets as non - performing, instead of the 90 days norm which is applicable for the larger cooperative and all commercial banks in india. this is intended to provide a measure of relief to the small ucbs and improve their financial performance through lower non performing advances requiring lower provisioning, which in turn would translate into higher profits

the urban cooperative banks. in this context, in order to improve the skill level of human resources and the technological infrastructure of ucbs, rbi in addition to subsidized programs also provides free of cost training on all important areas of banking operations to the staff and top managements of ucbs through its own training establishments as also through off - shore training programs at regional centers that have a large network of such banks. as mentioned earlier, a software has been developed for banks to help them prepare and submit all the returns to rbi, electronically and the software has been implemented free of cost by rbi, in the banks. recent developments as envisaged in the vision document, reserve bank approached states having large network of ucbs for signing memorandum of understanding ( mou ) to ensure greater coordination between rbi and state government for supervision and regulation of the ucbs. since june 2005, mous have been signed with 8 state governments viz. andhra pradesh ( 124 banks ), gujarat ( 296 banks ), karnataka ( 297 banks ), madhya pradesh ( 61 banks ), uttranchal ( 7 banks ), rajasthan ( 39 banks ), chattisgarh ( 14 banks ) and goa ( 6 banks ) which together constitute 844 ucbs i. e. over 45 percent of total number of ucbs and account for almost 23 % of deposits of the sector. as mentioned earlier, upon signing of mou, as per the agreement, rbi constituted state level task force for urban co - operative banks ( tafcub ), which is a six - member body with two representatives each from state government, ucb sector and reserve bank. the tafcubs are chaired by the respective regional directors of rbi and rcs is the co - chairperson. tafcubs also have representatives of the sector who provide local level inputs on banks that are on the lookout for taking over other weak banks for expansion of business. as such, the constitution of tafcubs and their role in the development of the ucbs in the state on sound lines constitutes a compelling attraction for the state governments to sign the mou with rbi. regional flavour of tafcubs in order to further instil transparency and improve inter regulatory coordination, the mou signed between rbi and the state government also envisages signing of another mou between the registrar of cooperative societies of the state and respective regional directors of the reserve bank. this mou stipulates the broad measures to be taken by the signator