To promote lending to priority sectors, the Reserve Bank today allowed urban co-operative banks (UCBs) to grant unsecured loans up to 25 per cent of their assets if certain conditions are met. "In order to promote lending to priority sectors and to provide impetus to the objective of financial inclusion it has been decided that UCBs fulfilling...conditions may, with the prior approval of the Reserve Bank, grant unsecured loans (with or without surety) upto 25 per cent of their total assets," the RBI said in a notification. The UCBs need to fulfill criterion such as, coverage of the entire loan portfolio of the bank under priority sector and that all loans to be sanctioned as small value loans of up to Rs 20,000 in a single amount. Besides, they should have assessed CRAR (Capital to Risk Assets Ratio) of 9 per cent and have assessed gross NPAs at less than 10 per cent of gross advances. RBI further said the financial parameters set by RBI may be considered as on March 31 of the previous year. Assessed CRAR and gross NPAs would be as assessed by the latest inspection carried out by the RBI, it said. "UCBs desiring to grant unsecured loans in excess of 10 per cent of total assets...may approach the Regional Office of UBD (Urban Banks Department) for permission," it added further.(Economic Times)