Sah Bharati has demanded an extension of two more months in the time-frame for the Expert Committee, constituted by RBI to strengthen urban cooperative banks to submit its reports.
In a letter to the RBI Governor which is jointly signed by the Sahakar Bharati President and the National General Secretary, the leaders have said that due to Covid conditions and the continued surge of Covid infections, it has not been possible for many UCBs, Academicians,Co-operators, etc to submit their views to the Committee.
The term of the Committee expires on 8th of June, 2021. “The current situation still remains grim, hence, we earnestly appeal to you to extend the time frame for giving the Report, by at least 2 months. This will facilitate submission of feedback to the Committee”, the letter reads.
It bears recall that in February this year, the RBI had set up an Expert Committee on UCBs to examine the issues and to provide a road map for strengthening the sector, leveraging on the recent amendments to the Banking Regulation Act,1949.
While N. S. Vishwanathan, former Deputy Governor, RBI is its Chairman, Jyotindra M. Mehta, President, NAFCUB was one of the members. Some of the members included Harsh Kumar Bhantwala, former Chairman, NABARD, Mukund M Chitale, CA, Prof M. S. Sriram, IIM Bangalore and a few retired IAS officers. Neeraj Nigam, CGM in RBI was nominated as the
Convenor.
The Terms of Reference of the committee included, among other things taking stock of the regulatory measures taken by the Reserve Bank and other authorities in respect of UCBs and assessing their impact over the last five years to identify key constraints and enablers, if any, in fulfilment of their socio-economic objectives.
Another important term of reference was reviewing the current Regulatory/Supervisory approach and recommending suitable measures/changes to strengthen the sector, taking into account recent amendments to the Banking Regulation Act and suggesting effective measures for faster rehabilitation / resolution of UCBs and assess potential for consolidation in the sector.
The Committee was also tasked with drawing up a vision document for a vibrant and resilient urban co-operative banking sector having regards to the Principles of Cooperation as well as depositors’ interest and systemic issues.
The Committee was given a time-frame of three months which is ending on June 8. Due to the pandemic, Sahakar Bharati has demanded its extension by two months.
Talking to Indian Cooperative Uday Joshi, National General Secretary said that Sahakar Bharati welcomes the RBI move on the constitution of the EC. But it’ also expects the broad based EC to consider issues like Drafting of Vision for the growth of UCB Sector including issuing of licences for new UCBs and Providing a road map with milestones.
Some of the other issues raised by Joshi included– Provision of voluntary conversion of Credit Coops into UCBs & vice versa, Review of guidelines regarding Board of Management and Guidelines for raising capital in the form of Shares, through Public Issue & on private placement basis.