Speaking at the 48th AGM of NAFCUB, the apex body of urban cooperative banks, held at NCUI headquarters in Delhi on Saturday, Chairman Emeritus and senior cooperator H.K. Patil urged delegates to shed conservatism and liberally offer loans to MSMEs.
“By nature, UCBs tend to be conservative. We are often more willing to offer loans to members for social events but hesitate when someone needs money to start a business, often reducing the requested loan amount by half,” said Patil. He stressed that MSMEs are the backbone of the economy, and their growth will ultimately drive the growth of UCBs as well.
Patil expressed satisfaction that UCBs are increasingly aligning their business interests with MSMEs, noting that 45% of their advances are directed toward the MSME sector. “This is truly commendable, and even the RBI has recognized it,” he said. He also highlighted the significance of the 63 million MSME units in India, which contribute 30% to the GDP and generate employment for 9 crore people, profoundly impacting the national economy.
In addition to MSMEs, Patil addressed the issue of the umbrella organization, sharing the exciting news that the long-standing dream has been realized, with the Umbrella Organization (UO) now operational in the country. He emphasized that this represents a tremendous opportunity for all UCBs to join, as the UO will provide numerous benefits, including robust IT solutions, professional advice, business scaling, and competitiveness through innovative business ideas.
Thanking UO Chairman Jyotindra Mehta for his tireless efforts, Patil encouraged UCBs to contribute to the UO. “So far, we have collected Rs 125 crore in share capital, and over the next six months, we should aim to increase this to Rs 300 crore,” he said.
Patil expressed disappointment that out of 1,500 banks, only 100 UCBs have contributed, with just 30 making meaningful contributions, thus helping meet the RBI’s requirement of collecting Rs 100 crore. “While the NCDC is willing to provide funds, if we rely entirely on them, our leadership in the UO may be compromised,” Patil cautioned.
Patil also supported Cooperation Minister Amit Shah’s vision of having one UCB in each town, urging UCBs to aim higher and establish a bank for every social group. “This is not a new idea, as we already have such banks in several states, including Karnataka and Gujarat. These banks are open to everyone and are not limited to specific communities,” he added.
Patil praised NAFCUB Chairman Laxmi Dass, noting that under his leadership, workshops are being conducted monthly across the country. “The best part is that he personally attends these events and leads from the front,” Patil remarked.
As a Minister in the Karnataka government, Patil also thanked Union Minister Amit Shah for resolving several issues that had plagued UCBs for over two decades. “Some issues remain unresolved, but we are in constant communication with the ministry and the RBI to address them,” Patil said, acknowledging Mehta’s goodwill and efforts in engaging with the ministry. “Amit Shah, having previously served as a director on NAFCUB’s board, understands our challenges realistically,” he added.
Patil shared a wish list of demands, which included streamlining the bank licensing process, removing restrictions on granting small-value loans, resuming loans to directors, and ensuring that UCB licenses are not revoked arbitrarily.
