One of the leading urban cooperative banks in Andhra Pradesh- Kanaka Mahalakshmi Cooperative Bank is on the verge of achieving multi-state status while also aiming to transition into a Small Finance Bank.
The resolutions to attain multi-state status and convert into a Small Finance Bank were presented at the bank’s recently held Annual General Meeting and were unanimously passed by the shareholders with one voice.
Talking to this correspondent at the bank’s headquarters at Visakhapatnam, the bank Chairman Komma Reddy Rambabu informed, “We are eager to expand our footprint in the state of Telangana. We have obtained the necessary permissions from our shareholders in this regard. Once we secure the NoCs from both states, we will submit our application to the Reserve Bank of India”, he said.
Besides, we plan to become a scheduled bank and hope to be eligible for scheduled status within a few years. Most importantly, our goal is to convert into a Small Finance Bank, which will open new avenues for our business. Expanding our footprint within the cooperative banking structure is challenging, especially due to the RBI’s stringent rules and regulations,” said Rambabu.
He further said that Cooperative Banks are facing major challenges in collecting deposits, particularly from the youth, who are high-risk takers and prefer investing in SIPs, stock markets, and other ventures. “There is a need to take their concern seriously, otherwise it will badly impact the bank’s performance”, he noted.
Rambabu urged the RBI to provide some relaxation to urban cooperative banks in meeting targets under Priority Sector Lending and small-ticket loans and he called for the resolution of pending issues. He further noted that the RBI’s attitude toward cooperative banks has not been particularly encouraging, he griped.
Kanaka Mahalakshmi Cooperative Bank, which has completed 25 years of operation, Chairman stated that the RBI should lift the restrictions imposed on urban cooperative banks regarding loans to directors and their relatives.
‘Our board is well aware of all the directors, their families, and their relationships with others. We can offer secured loans to our directors, which are safe for the bank,’ he added.
Regarding the bank’s financial performance, it has been on a growth path since its inception. Established in 2000 with a share capital of Rs 51 lakh, the bank’s share capital has now reached Rs 31.38 crore as of 31st March 2024.
In 2000, deposits and loans & advances were Rs 7.90 crore and Rs 6.19 crore, respectively. As of 31st March 2024, deposits have surged to Rs 852.86 crore, while loans & advances stand at Rs 571.23 crore.
Over the past two financial years, the bank has successfully maintained a net NPA of zero percent, achieving a net profit of Rs 10.66 crore as of March 31, 2024. Interestingly, the bank has also attained an ‘A’ audit grade since its beginning.
