The leaders of Urban Cooperative Banking sector have reacted to the news of RBI’s total control over UCBs. While some have lauded the move, there are also some like Chalasani Raghavendra Rao, Chairman, Visakhapatnam Cooperative Bank who see in it a brazen attempt by the Centre to enter into states’ turf since cooperation is a state subject-Editor
We reproduce their reactions verbatim:
Cosmos Bank, Group Chairman, Mukund Abhyankar
It will certainly yield more protection to Depositors; but sweeping powers to RBI may be dangerous to weak/very tiny UCBs. Forced amalgamations compulsory mergers. It will reduce the total number of UCBs even below 1000 in India. Moreover no Capital infusion (as in case of Public sector banks) will be there for UCBs. So the UCB sector will have to be more professional henceforth.
Sahakar Bharati, National General Secretary Uday Joshi
The ordinance for the amendment to the BR Act is a step forward to strengthen the UCB Sector. Sahakar Bharati seconds it.
Now Sahakar Bharati demands that RBI should 1 Formulate a vision document on how the UCB Sector will prosper in future. 2 Formulate a road map for UCBs with steps for improvement in a phased manner without change in their cooperative structure.
Kalyan Janata Sahakari Bank, CEO, Atul Khirwadkar
Long awaited BR Act amendments have seen the light of day with the passage of the ordinance by the President of India. This is basically not a news as it was a foregone conclusion post PMC and other smaller debacles in the sector. The popular story moving on social media is the dual control has been set aside by the Central government. Much to the chagrin of State governments, as the Sarkaria Commission had awarded “Cooperatives” as state subject. No clarity on DCCBS as they would be regulated by RBI via NABARD. Thus the story is not new. But why talk now then?
Chalasani Raghavendra Rao, Chairman, Visakhapatnam Cooperative Bank
The ordinance is unwarranted. The statement of the minister after cabinet meeting itself has misguided the people of our country. The minister’s statement gave an opinion that so far 8.6 crore of UCBs depositors are not having any kind of protection for their 4.84 lakh crore of deposits. Is it fair on the part of the government.
Kokan Mercantile Cooperative Bank CEO Sadanand Nayak
This is going to strengthen the supervisory power of RBI not only on Banking but also in management. Now RBI will be the single Supervision Authority. No More UCB s will be under dual control. Hence RBI will have to ensure safety of public money in UCBs. UCBs also can go to market for raising Capital or preference shares/bonds at par or premium and solve their problem of CRAR shares will be listed and available for trading.
Vidyadhar B Dandawate Former CEO Jalgaon Janata Sahakari Bank
It’s a welcome move. Now UCBs are on par with commercial banks. They must strengthen themselves by increasing professionalism and improving governance in management . Of course there are some issues also . They can’t return the capital acquired through share linking to borrowing norms. Refund of capital is possible through transfer of shares only . This may pose some problems for them. However , this move will increase public confidence on UCBs in general.
Indraprastha Sehkari Bank, CEO, Rajeev Gupta
Hon’able President approves the ordinance, which besides bringing coop banks under RBI, also amends Sec45 of Banking Regulation Act to enable reconstruction/amalgamation of a bank WITHOUT a MORATORIUM.
Important move to avoid disruptions for depositors & others when a bank is being rescued. In my opinion, It’s better for our sector.
Gnana Shale Souharada Coop Society Chairman, Sridhar Rao
It’s a Very Good Decision. In future, Let Govt, Extend this to Co-op Societies also.
Ramgarhia Cooperative Bank, Vice-Chairman, Ajit Singh Sehra
Good news for cooperative banks depositors now their deposit is safe congratulations. I think now the co-operative banks movement is finished.
What about adarsh credit cooperative society ltd and other society’s?