The Kangra Co-operative Bank launched RTGS services successfully from its own platform installed at its Service Branch at Pahar Ganj in New Delhi recently.

Kangra Bank is the largest urban co-operative Bank of the National Capital Territory of Delhi. It is said to be the first Co-operative Bank not only in NCTD Delhi but also in northern region of the country to have joined RTGS network run by the Reserve Bank of India.

This project was initiated in November 2011 with the active support from RBI, Mumbai and IDRBT, Hyderabad.

The Bank has its own website (www.kangrabank.com ) since November 2006.

It is also in the process of  having CBS systems across all its seven branches. Two of its branches have already adopted core banking solution.

The CEO Mr Attar Chand Parmar who had earlier been Chairman of this Bank for a long time said that these achievements for a non-scheduled cooperative Bank likr ours is not possible without the sincere efforts of the staff.

He also credited Shri Laxmi Dass,Chairman and Directors of the Bank for their vision and continuous guidance for the growth of the bank.

Participating in a Punjab and Maharashtra cooperative bank event in Bombay H R Khan Deputy Governor of the RBI said the apex bank would soon implement the suggestions made by the Malegam Committee on the cooperative banks.

The committee, among other things, has recommended a dual approach of having a board of directors   appoint a board of management to run the cooperative banks and a relaxation of entry norms for the cooperative banks in the areas not yet covered by banking services, the RBI deputy added.

Mr Khan urged the cooperative banks to put in their utmost efforts to expand their business as their growth thus far leaves a lot to be desired. The share of the cooperative banks in banking business has gone down from six percent to a mere two percent, he noted.

However, the RBI deputy governor lauded the cooperative banking sector for improving its assets   quality and accomplishing mergers of weaker links with stronger ones in its chain.

Main recommendations of Malegam Report

UCBs play a useful role and there is need for a greater presence of UCBs in unbanked districts and in centers having population less than 5 lakh. It is necessary to encourage new entrants to open banks and branches in States and Districts which are unbanked or inadequately banked. It is equally necessary to discourage new entrants from opening branches in Districts and population centers which are already adequately banked.

The existing well managed co-operative credit societies meeting certain financial criteria like profits, capital adequacy, NPAs’ proportion etc. should be given priority for granting licenses as urban co-operative banks particularly in unbanked or inadequately banked centers.

Organization Structure of New UCBs

There should be segregation of the ownership of the UCB as a co-operative society from its functioning as a bank. The new organization structure shall consist of a Board of Management in addition to the Board of Directors.

The Board of Directors (BoD) would be elected in accordance with the provisions of the respective Co-operative Societies Acts and would be regulated and controlled by the RCS / CRCS.

The (BoD) will establish a Board of Management (BoM), consisting of persons with professional skills, which shall be entrusted with the responsibility for the control and direction of the affairs of the Bank assisted by a CEO who shall have the responsibility for the management of the Bank.

RBI would have unfettered powers to control and regulate the functioning of the UCB and of its BoM and of the CEO in exactly the same way as it controls and regulates the functioning of the Board of Directors and the Chief Executive in the case of a commercial bank.

It should be made a condition of the license that every new UCB should be required to have a Board of Management (BoM) to be appointed by the Board of Directors (BoD) and a Chief Executive Officer (CEO) to be appointed by the BoM. While the BoD will be responsible for laying down the broad contours of strategy, the BoM will be vested with the mandate to direct and control the day-to-day operations of the UCB within the limits set by the BoD. At least 51 per cent of the members of the BoM should have special knowledge or practical experience in the matters specified in Section 10 A(2) of the B. R. Act, 1949.

Members of the BoD can be members of the BOM provided they fulfill the conditions specified. Members of the BoM can be paid such sitting fees as the BOD may decide subject to a ceiling to be specified by RBI. The BoM to follow a Code of Corporate Governance to be specified by RBI.

The CEO shall be responsible for the management of the whole or substantially the whole of the affairs of the UCB but shall be subject to the control and direction of the BoM. The appointment of the CEO shall be subject to the prior approval of RBI.

Audit by a Chartered Accountant to be appointed by the BoM from out of a panel of approved auditors maintained by RBI and subject to rotation after four years.

Umbrella Organization

There should be two separate Umbrella Organizations viz. a national level organization which provides payments and settlement services and other services normally provided by central banks as also liquidity support to its members; and one or more organizations which provide the management, IT, training and other services which the UCB sector needs.

The national level UO should preferably be in the form of a multi-state UCB with membership being restricted to and mandatory for all UCBs other than scheduled UCBs.

Member UCBs should be required to maintain their CRR in the form of deposits with the UO.

The UO should invest its funds only in the form of balances with RBI, deposits with commercial banks or in SLR securities and in no other form.

The UO should offer Repos and Reverse Repos facilities to UCBs in the same manner as RBI offers to commercial banks and at the same rates of interest.  In turn, it should enjoy Repos and Reverse Repos facilities with RBI.

UCBs can avail of Repos facilities only to the extent of their excess SLR holdings.

Until the Payments and Settlements facilities are provided directly to UCBs, the UO will act as a gateway to provide these services for a fee to UCBs. In turn, the UO will be a member of the Payments and Settlement System.

Being a UCB, the UO would have a Board of Management and will be subject to the regulation, supervision and inspection of RBI.

Dear Sir,

By mistake NEFT transfer off Rs.100000/- was paid twice in place of once- from our bank, Vaidyanath Urban Co-op Bank to the Federal bank in the Solapur branch dated 20/3/2012. Federal Bank is not responding to us even though we have contacted its branch several times.

Our Bank Submitted following letter, email and statement

1) emial on sol@ederalbank.co.in letter, Our Custmer Letter for one tine NEFT Dtd 21/3/2012

Federal bank Solapur responded though –email Dtd.21/3/2012 We are confirming the issue at our end and will settle the issue as early as possible on our email id vbank.parli@gmail.com)

2) When it was not settled we complained at Federal Bank Regional Office Mumbai complaint 6/5/2012 and its answer Letter dated 12/05/2012

3)Again through email Dated 20/8/2012 we wrote to federal bank regional office Mumbai bbyg@federalbank.co.in, head office ernakulan fbi@federalbank.co.in to help us recover our excess NEFT Amount of Rs.100000/-

No response yet!

Could anybody help us? Please mail us how to complain with RBI and email address of complaint office

Thanking You

From

Account Office

Account Section, Head Office,

The Vaidyanath Urban Co-op Bank Ltd. Parli-V.,

Dist Beed 431515.

Phone No- 02446/222134,

Ritesh

Dear Sir,
I am a member of the management committee in our society.

Can a society pass a resolution to put a blanket ban on the foreign national’s entry to the society?

I C Naik

No. It is against the very 1st Principle of Cooperation.

“Co-operatives are voluntary organisations, open to all persons who use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.”

Cooperative Housing Society is bound to admit all those who meet the eligibility criteria laid down in the State’s Cooperative Act. For example Section 22 of Maharashtra Cooperative Societies Act permits an individual, who is competent to contract under the Indian Contract Act, 1872 to become a member of a Society. However, as per Section 23(1) for a “sufficient cause’ an individual can be refused membership.

Non Compliance of any regulation under any applicable Indian law by an individual is a sufficient cause for such refusal.

If any foreigners are likely to become member for any reason, as a matter of abundant caution the society should lay down additional (In addition to those in the bye laws) conditions as to eligibility criteria which should definitely include Security Clearances and Clearance for acquisition of Property as laid down by the Government/Statutory Authorities.

Exchange Control Dept of RBI has issued a Notification No-FEMA 21 /2000-RB dated 3rd May 2000 laying down conditions for ac acquisition of immovable property.

Rakesh Chopra, one of the Indian Cooperative readers has updated on Veera Shaiva Cooperative Bank which we found useful for those affected by the massive fraud.

It is noteworthy that the Veera Shaiva Cooperative bank’s directors and some borrowers had allegedly conspired to loot the bank and the fraud involves an amount exceeding 50 core.

More than 15 thousand investors stand affected by it.

We present below Mr Chopra’s take on the issue-Editor

Update – Veera Shaiva Cooperative Bank – RBI has sent a reply to us that RBI has to do nothing and we should approach the bank and the liquidator. RBI has just forwarded our request for payment of our deposits to bank’s H.O. at Chembur for reply.

DICGC has also responded that depositors should approach the liquidator and the bank and DICGC cannot do anything till liquidator file the depositor’s claims officially.

The address of liquidator appointed is – Mr. GAWADE (Phone 27574965), District Deputy registrar (DDR), ‘M’ ward, II floor, Konkan Bhavan, CBD Belapur, Navi Mumbai.

The liquidator is supposed to settle the claims of each individual depositor by claiming money from DICGC. But it appears that Liquidator is not able to function as the bank’s Chairman and directors have filed cases with High Court of Mumbai and appeal with MOF, GOI,N.Delhi to get bank’s license back.

It is understood that next date of hearing in court is September 17, 2012. Depositors should approach the liquidator in Konkan bhavan or at Bank’s Chembur H.O. and press him to move ahead for preparing claims of each depositor on the basis of bank’s deposit ledgers and submit all the claims to DICGC immediately so that due diligence & verification process without any delay is initiated by DICGC (RBI Bhavan, II floor, Opposite Mumbai central railway station, Mumbai).

RBI cannot go scot free. RBI gave good audit ratings and allowed the bank to continue to function till 2011 – then what suddenly happened that it has to cancel the license of the bank and order liquidation. Let all depositors of the bank join together and file a rejoinder in High court and also make RBI as well as DICGC as parties to the case.

RBI as regulator need to be fully accountable to depositors but RBI has become high handed and with no accountability. This must be checked. Depositors must get their deposits paid immediately. Mr DK Mittal – Secy. DEA, MOF, GOI should also make a statement immediately and direct SBI to take over the bank and repay all the depositors in full immediately.

The Reserve Bank of India has imposed a monetary penalty of Rs five lakh on the Rupee Co-operative Bank based in Pune.

The Urban Cooperative Bank was found violating the guidelines of the Reserve Bank of India.

Rupee cooperative bank granted term loans to some borrowers much in excess of the limit of Rs ten lakh. The bank was also guilty of sanctioning fresh Cash Credit limit to the existing borrowers in excess of Rs ten lakh in 4 cases, in violation of the operational instructions.

The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply.

After considering the facts of the case, the bank’s reply and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.

The Reserve Bank of India has imposed a monetary penalty of Rupees five Lakh on the Bharath Co-operative Bank Ltd., Bangalore, Karnataka.

The Urban Cooperative Bank was found violating Reserve Bank of India’s instructions on sanctioning/renewing of loans and advances to directors, their relatives and firms/concerns in which the directors are interested.

The Bank is also guilty of suppressing of such information by not reporting the same in the relevant quarterly statement submitted to the Reserve Bank of India and also for furnishing false information to the Inspecting Officer of Reserve Bank.

The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply.

After considering the facts of the case, the bank’s reply and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.

Cooperative banks are mostly the whipping horses for Nabard and RBI. But what they do not seem to take into account is the unviable propositions these banks are subjected to. A case in point is Karnataka.

Karnataka Chief Minister said on Thursday that the state has decided to wave loans to the tune of Rs.25000 obtained by farmers from the agri-cooperative societies.

Karnataka has had a deficient monsoon and some portions of the state are already seriously affected by drought.

Talking to the press at Bangalore ,Chief Minister Jagdish Shettar said, his govt.would have to undertake both short term and long term measures to organise relief works. The state govt. has called upon the center to waive loans given to farmers by the nationalised banks.

Well, nationalized banks ever eager to earn profit, may or may not pay heed to CM, cooperative banks have no options and would rather happily help the poor farmers out.

Observers say it is evident from Chief Minister’s remarks that the cooperative bodies would play a role in fighting the difficulties arising out of drought in the state.

The Reserve Bank ofIndiahas imposed a monetary penalty of Rupees five lakh on Ernakulam District Co-operative Bank located in Kerala.

The Bank was found violating RBI norms by granting unsecured loans to M/s Mithra Agricultural Produce Committee (MAPC).

It also violated the  Act in case of Rural Academy of Management Studies (RAMS).

The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. Based on the reply, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

The Registrar of Co-operative Societies, Maharashtra has also been requested to issue an order by RBI for winding up the Premier Automobiles’ Employees Co-operative Bank and appoint a liquidator for the bank.

RBI had earlier advised the bank to explore the possibility of merger with another bank. However, the bank did not take any action in this regard.

The RBI inspection revealed various deficiencies and irregularities in the working of Bank and it restricted it from opening ATMs/ extension counters/ branches and extending the area of operation, declaration of dividend without permission of the Bank and acquiring or shifting its office premises.

RBI also found out that the bank had given loans to several persons who were not employees of Premier Automobiles Ltd.

It also noted that the performance of the committees of the Board was not satisfactory. The bank had violated RBI guidelines on induction of professional directors on the Board of the bank.

The deterioration in bank’s financial position showed the inability of the management to bring about any major improvement and arrest the deteriorating financial position of the bank. The performance of the Board of the bank was not satisfactory as it could not take initiative in framing risk management policies of the bank.