The central board of Reserve Bank of India discussed in detail the regulatory and supervisory framework of co-operative and commercial banks during its meeting on Friday.
The CISBI replaces the legacy master office file system.
These banks have been given a period of a month to notify the regulators of the extent of compliance. Ms Sitharaman had earlier said the government is considering amending laws to curb malpractices at the country's co-operative banks, following allegations of fraud in PMC Bank.
"After the initial submission of information on CISBI portal, a one-time confirmation stating that Correct and updated Bank-level information has been submitted on CISB" shall be sent by banks to the concerned Regional Office of Department of Co-operative Bank Supervision within one month of issuance of this circular". Like in IL&FS, in the PMC case too, there appears to be culpability on the part of the management and the board of the bank considering that the bank's loan exposure to a single firm, HDIL, alone constituted 73 per cent of its assets and several dummy accounts were created to camouflage this.
It may be recalled that the Reserve Bank of India (RBI) had placed PMC Bank under "directions" in September 2019 due to its weak financial health.
More than two dozen co-operative banks are now under the RBI administration, but PMC Bank - with deposits of Rs 11,620 crore as of March 31 - is by far the largest. The board, chaired by RBI Governor Shaktikanta Das, also discussed the role of payments banks and small finance banks in enhancing financial inclusion. The RBI has capped withdrawals from the bank at Rs 1,000 and later increased it to Rs 25,000 following protests by depositors.
The central bank has already migrated all the past information of these lenders to CISBI, it said. Banks can also use the facility to access/download the data related to them.