Reacting to the passage of the Banking Regulation (Amendment) Bill, 2020 from both the Houses of Parliament, Maharashtra Urban Cooperative Banking Federation (MUCBF) Chairman Vidyadhar Anaskar said, “The fear about the government intention of converting the cooperative banks into commercial banks was gone when Union Minister Nirmala Sitharaman assured that co-op banks would run on cooperative principle and equal voting right for all members based on the principle of one member one vote remained unaffected”.
Anaskar who was earlier opposed to some provisions of the amendment, is now satisfied with the passage of bills from both the houses. “We must accept it as it is. We have to change the working style of the co-op banks. We have to run the business with the said amendment. Though earlier we had opposed some provisions, now this debate should stop”, he said to this correspondent over the phone.
Clearing the doubts with regard to the provision of Section 12 which prohibits refund of shares, which is newly introduced, he said those shareholders who want to take their share money back, it can be transferred to new applicants. At present, there is a five year locking period if a member wants to get their share back.
However, he was disappointed with the fact that very few members of both the houses were present during the introduction of the Banking Regulation (Amendment) Bill. “Only 32 members were present in the Lok Sabha while in Rajya Sabha only six. Nobody suggested any amendments in the bill. It is worth mentioning that several MPs in Lok Sabha and Rajya Sabha are from the cooperative background”, he underlined
The financial status of 277 urban cooperative banks is weak. 105 cooperative banks are unable to meet the minimum regulatory capital requirement. 47 banks have net worth in negative. 328 urban cooperative banks have more than 15% gross NPA ratio, said Sitharaman in the Lok Sabha.
Readers would recall that the Banking Regulation (Amendment) Bill, 2020 which was introduced in the Lok Sabha last week on Monday by Finance minister Nirmala Sitharaman was passed in the Rajya Sabha on Tuesday through a voice vote.
