RBI allows Ujjivan SFB to form a special committee

WHY IN THE NEWS?

Reserve Bank has given its nod to the Ujjivan Small Finance Bank (SFB) to form a special committee of directors in order to oversee the operations in absence of an MD and CEO.

About:

• The Special Committee of Directors will comprise of three independent directors as its members.
• This committee will oversee the operations and administration of the bank in effect from September 16.
• Ujjivan Small Finance Bank had appointed Carol Furtado to take charge as officer on special duty (OSD). She will be in charge till September 30, 2021. She was appointed after the resignation of Nitin Chugh as MD and CEO.

What is the issue?

Ujjivan SFB witnessed some top-level exits in recent days besides high level of bad assets and management issues. Its overall stressed pool stands at 15.6 per cent of the loan book. It also includes gross non-performing assets of 9.8 per cent as well as restructured loans of 5.8 per cent. Furthermore, the portfolio-at-risk has come down to 30 per cent as of June 2021. Its stock closed at Rs 20.60 apiece on BSE.

Ujjivan Small Finance Bank Limited

It is an Indian small finance bank, with headquarter in Bangalore. Its operation was started from February 1, 2017. Ujjivan Financial Services is having a stake of 80 percent in the bank. The bank is licensed under Section 22 (1) of the Banking Regulation Act, 1949 in order to carry out small finance bank business. It received Scheduled Bank status in August 2017 from the Reserve Bank of India