No powers are available with RBI for constituting Boards of UCBs, removal of directors, supersession of Board of Directors, auditing of UCBs, winding up and liquidation. The resolution regime for UCBs exists in a rudimentary form. The growth of the sector, therefore, has to be in a carefully calibrated manner, consistent with legal framework and regulatory parameters and their limitations.
It is in the above background that the High Powered Committee had as one of its terms of reference to determine whether unbridled growth of UCBs can be allowed and if so, in what form it should take keeping in view the restricted ability to raise capital, lack of level playing field in regulation and supervision and the absence of a resolution mechanism at least on par with commercial banks.