After two decades of persistent effort, the long-awaited moment has finally arrived. Union Minister Amit Shah is poised to inaugurate the National Urban Cooperative Finance Development Corporation (NUCFDC) at Vigyan Bhawan in Delhi on Saturday.
Speaking to the Indian Cooperative, the Chairman of the new body NUCFDC, who headed NAFCUB until recently, Jyotindra Mehta, said, “the long struggle of the last 20 years is finally bearing fruit.” Mehta stated that the new body will act as a FINTECH Company, which will serve various purposes for both large and small banks in the cooperative banking sector.
“The setting up of the umbrella organization is another milestone in achieving the goal of ‘Sahakar se Samriddhi’ to make ‘Aatma Nirbhar’ Bharat. This initiative aims to modernize and strengthen the Urban Cooperative Banking Sector in India, ultimately benefiting both the banks and their customers”, as per a release from the PIB.
The Board of NUCFDC consists of eminent bankers with the aim of making it a world-class professional body, claimed Mehta, adding that H K Patil, ex-Finance Secretary Krishna Kumar, former Deputy Governor of RBI R B Burman, and former Chairman of PNB Ajay Kumar are on its board.
The establishment of this umbrella organization will ensure specialized functions and services to cooperative banks, facilitate communication between banks and regulators, and address challenges faced by Urban Cooperative Banks, such as technology constraints and issues regarding the range of services.
Mehta added that the software meant for ensuring cybersecurity of UCBs would be made available to everyone. Besides, NUCFDC will also negotiate hard for bulk buying of hardware (computers) for its members.
Mehta also underlined that the Umbrella would offer fee-based services to encourage insurance and other business ideas even for smaller banks which could not do so hitherto. NUCFDC is also poised to encourage wholesale banking which involves the flow of excess funds from one UCB to another.
NUCFDC will also have an advisory role and would engage its members in what is known as Treasury Management, which involves making prudent decisions on buying government securities, underlined Mehta.
Having managed more than 100 crores contributed by more than 134 banks so far, NUCFDC aims to raise capital to the tune of Rs 300 crores by the next year. All the top UCBs including Saraswat Bank, SVC, Cosmos have infused share capital along with NAFCUB and a few state federations including those of Gujarat and West Bengal.
At present, there are over 1,500 scheduled and non-scheduled Urban Cooperative Banks in India with a total number of branches exceeding 11,000. The banks have a deposit size of over Rs 5.33 lakh crore and total lending of more than Rs 3.33 lakh crore. Many of these banks have constraints related to technology platforms and difficulties in offering modern banking services.”