In a bid to increase its supervisory control over urban cooperative banks (UCBs), the Reserve Bank of India has mandated that UCBs with deposits in excess of Rs 100 crore will need its prior approval before appointing their CEOs, the Times of India reported.

In its attempt to better regulate the UCBs, the RBI had previously capped a limit for single borrower and enhanced sector lending requirements. The latest move will now influence the hiring of the top executive at these firms.

The RBI's latest announcement is part of the guidelines on the constitution of the board of management (BoM) which will be in addition to the board of directors (BoD) for UCBs with Rs 100 crore or more in deposits, the report said. However, the guidelines will not apply to Salary Earner's Bank.

The RBI's move comes in the wake of a torrid 2019 for UCBs. Punjab & Maharashtra Co-operative (PMC) Bank was rocked by fraudulent lending practices that saw many of its customers suffer as the RBI imposed withdrawal limits for account holders.