Urban cooperative banks of National Capital Region have reacted in a mixed manner on the issue of latest RBI guidline on opening of Urban Cooperative bank with a seed capital of Rs 3 crore in place of Rs 15 lakh.

Talking to Indiancooperative.com Yatindra Mallik, Chairman of Keshav cooperative bank welcomed the move and emphasized. that it would be always better to take the opinion of urban cooperative banks before issuing guidelines. The mutual exchange of ideas would help UCBs to implement RBI guidelines better, he added.

Noble Cooperative bank supported RBI move while talking to the correspondent of indiancooperative.com. Noble bank is active in Noida and had to suffer the pain of shifting on accounts of Supreme Court directions against banks in residential area. V .K Sharma its CEO said that even otherwise it cost roughly Rs 50 lakh in opening a branch of a urban cooperative bank. But he resisted governmental effort to put cooperative banks on the same footing with corporate banks when it comes to regulation and supervision.

The Chief Executive of Citizen cooperative bank Shri Prem Mishra welcomed RBI move saying this would check fake banks from coming into existence. Such a step would also reduce the incidence of closing down of cooperative banks which are started without viable capital, he added.

Many other banks such as Jamia Cooperative bank felt that Rs 3 crore is a big amount given the nature and scope of cooperative banks. Such a move by RBI would discourage many prospective do-gooders who intend to help those marginalized sections of society no body is bothered with, they argue.

Once again, the Supreme Court has ordered the Noida Development Authority to provide banks including the cooperative banks located in residential areas with space so as to enable them to relocate soon.

The court has given six weeks’ time for the relocation.

However, V K Sharma CEO Noble Cooperative Bank and Prem Mishra of Citizen Coop Bank consider the time limit fixed by the court inadequate as the relocation is a complicated business involving countless formalities.

Additionally, in their view banks should be provided with furnished ready to move in places rather than just spaces for the relocation.

Their banks are not realtors and if treated as such their shifting would become well-nigh impossible, they said to Indian Cooperative.com.

They are optimistic nevertheless and hope that the Noida Authority would soon take necessary steps to implement the Supreme Court order.

Manoj Kushwaha

The Supreme court direction to banks operating in residential areas in Noida to shut down immediately has caused much dismay among the urban cooperative bankers active in the region.

When the indiancooperative.com asked  bankers’ their reaction on the supreme court’s direction, they  said  they would  obey the court’s ruling but  they  would  face  serious   difficulties of  relocation.

Prem Mishra , secretary Citizen bank  said that they would demand suitable space  from  the   Noida authority so that they could continue to render their services to the local public.

The apex court has given this ruling while examining a public interest litigation in the matter.

However, Noble cooperative bank Chief Executive  V. K. Sharma  maintained that the citizens should have easy access to the banking services and therefore the court’s ruling  might cause inconvenience to the public.

As the banks  had no choice but to submit to the apex court’s direction , they would  ask the Noida development authority to provide them with suitable space.

Urban Cooperative Banks are a community banking service and are generally bare of the scale of economics of the Corporate banks. Removing them from residential areas would not only prove costly for the banks but also defeat the very purpose of serving the community by being easily accessible to them.

By Manoj Kushwaha

Noble cooperative  Bank in NOIDA of Uttar Pradesh  has  consistently been  growing  and   managing  the  bottom-line  claimed Vijay Sharma  Chief Executive Officer & Secretary of the bank , talking to the indiancooperative.com correspondent.

While  the bank  has  had  an annual turn- over of Rs. 500 crores and a net profit of 1crore 16 lacs,  it   has set a target of 1 crore 50 lacs  of profit for the year 2011.  The  bank boasts  5 branches ,  15 thousand depositors and  a democratic  management   holding   elections every three years.

He regretted that   the banks are rated unimportant  in the cooperative movement  as their  promoters  are denied stability  and  directors not chosen on merit.

The cooperative banks not only provide their  account holders core banking service  but also offer them   daily deposit scheme. The banks have   zero non-performing assets  as there are no defaulters. It  transacts business  all the days in a week. Their main goal  is not profit but to protect the interests of their account holders, he added.

The noble bank strikes  the right  balance  of experience and youth  in its  workforce. The  bank  pans out as a  special entity  in that  the employees of the bank  compose the board of  directors and  are not paid a salary.