Mumbai, Aug 8 (IANS) Union Home Minister and Minister of Cooperation Amit Shah on Saturday said the Reserve Bank of India (RBI) has adopted a supportive approach towards urban cooperative banks (UCBs) in recent years and urged both sides to move beyond long-held perceptions of each other to strengthen the sector.
Speaking at the inauguration of the National Urban Cooperative Finance and Development Corporation’s (NUCFDC) new office building at the BSE here, HM Shah said urban cooperative banks and the RBI should work together with greater confidence and trust.
The minister said the central bank had responded positively whenever the government and the cooperative banking sector approached it constructively.
He cited a series of measures introduced by the RBI, including easing branch expansion norms, permitting doorstep banking services, allowing UCBs to issue demand drafts and life certificates, and appointing a dedicated nodal officer for the sector.
In addition, HM Shah welcomed recent regulatory measures for UCBs, including higher limits for gold loans and the introduction of one-time settlement provisions.
He also noted that urban cooperative banks currently hold deposits of more than Rs 6 lakh crore.
His remarks came days after RBI Governor Sanjay Malhotra announced progress on introducing an on-tap licensing framework for urban cooperative banks as part of the central bank’s developmental and regulatory policy measures.
Highlighting the business potential of the sector, the minister said that small borrowers constitute a relatively secure lending segment for cooperative banks.
Recalling his tenure as chairman of a cooperative bank in Gujarat, he said the institution had extended loans of up to Rs 2.5 lakh without collateral and achieved repayment rates of over 99 per cent, including interest.
The minister also called on UCBs to strengthen their engagement with NUCFDC, the umbrella body for the sector.
Pointing out that only about 690 banks are currently members, he suggested reducing membership fees to encourage participation from all around 1,400 UCBs across the country.
HM Shah announced that NUCFDC’s head office will be shifted from New Delhi to Maharashtra.
Maharashtra is home to 449 urban cooperative banks and, along with Gujarat, Goa and Karnataka, accounts for around 70 per cent of all UCBs in the country, according to the minister.
–IANS
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