Despite NAFCUB dwelling on the perils of converting into a small finance bank during its recently concluded AGM, Uttar Pradesh-based Shivalik Mercantile Co-operative Bank has received the go ahead from the Reserve Bank of India to convert itself as a Small Finance Bank (SFB).
In a statement the Bank said “On January 6, 2020 Shivalik Mercantile Co-operative Bank Ltd. received in principle approval from RBI to transition to a Small Finance Bank (SFB) (a Scheduled Commercial Bank). This has been possible due to your continuous patronage. As of March 31, 2019, thirty-one private commercial banks including ten SFBs were in operation”, it added.
The bank was given an 18 month timeline to commence business as a Small Finance Bank. The bank expects to commence business as a Small Finance Bank by April 2021.
Commenting on this, Suveer Kumar Gupta, MD & CEO of Shivalik Mercantile Cooperative Bank, said, “It is an honour for Shivalik to be the first UCB in India to transition to a Small Finance Bank.”
A scheduled commercial banking license will alter our identity significantly allowing us to offer banking services across the country, offer a complete range of retail banking solutions to our customers and further our goal of financial inclusion, said the CEO.
“With a rich 22-year banking heritage and experience, Shivalik is well placed to significantly benefit from becoming a Small Finance Bank. Our vision is to build a new age bank which is digital first and customer oriented at its roots”, he stated.
Shivalik can rapidly innovate and rollout highly personalized products and services for its customers through its advanced technology platforms including the ability to implement Open Banking, and easily collaborate with the external ecosystem, including fintechs, digital businesses and non-banking financial service providers, claimed the CEO.
Shivalik is the largest multi-state Urban Co-operative Bank in Uttar Pradesh and is currently serving customers in Uttar Pradesh, Madhya Pradesh, Delhi and Uttarakhand.
It has a base of 4 lakh customers. As on 31 March 2020, the total business size of the bank was approximately Rs 1,800 crore.
The bank is already live on all significant payment platforms and prides itself in providing a best-in-class digital experience to the customers. The bank’s major technology platforms are powered by Infosys Finacle using a cloud native model.
A scheduled commercial banking license will alter our identity significantly allowing us to offer banking services across the country, offer a complete range of retail banking solutions to our customers and further our goal of financial inclusion.
Close on the heels of the Uttar Pradesh-based Shivalik Mercantile Co-operative Bank taking the lead among urban co-operative banks to convert into a Small Finance Bank, Mumbai-based New India Co-operative Bank, too, is planning to go down that road, media reports say.
Nafcub President Jyotindra Mehta had expressed satisfaction at the 40th AGM that so far only five applications have come from the UCB sector to convert to small banks. Mehta said they would be worse off if they bite the bait.
Vidyadhar Anaskar, another important leader of the sector from Maharashtra recently started a “Hath Jodo campaign” asking UCBs to desist from conversion. AP chapter of Nafcub also wrote a letter underlining how RBI is working at a strategy to force UCBs to convert into SFBs.