Assuring delegates of all-out efforts to get the “8-year tenure limit” clause for the elected board members of UCBs annulled, NAFCUB President Jyotindra Mehta exhorted them to strategize in a manner that their banks grow by 25% in the next five years. Mehta was speaking at the 64th AGM of the apex body of urban co-op banks, held at the NCUI auditorium in Delhi on Wednesday.
Nafcub President Mehta elaborated in detail on how the BR Act amendment of having only 8 years term for elected directors of UCBs could disrupt the urban cooperative banking movement.
“There are about 1534 UCBs. The government has almost decided the same “8-year term” rule for DCCBs and State Co-op Banks. Thus, of the total of 2000 co-op banking entities there are about 40 thousand elected directors who are carrying the flag of co-operative for years. With this new clause in the B R Act, about 32 thousand elected directors will be shown the door, causing massive disruption to the co-operative banking sector”.
“We have represented against this before everyone including RBI, Ministry of Cooperation, and Ministry of Finance. We are also building a front with the participation of apex co-op bodies including NCUI and NAFSCOB. Three of us would chalk out a legal course to fight the 8-year term limit, if other routes are closed”, underlined Mehta.
The Ministry calls us whenever a meeting between the RBI and the Ministry takes place and it takes our input, said Mehta adding that ever since the new ministry has been formed, Nafcub interaction has grown exponentially compared to the past.
These regular interactions with the ministry have led to several gains including the raising of housing loan limit for UCBs, UCBs being allowed to do door-step banking, the difficulty to get permission to open new branches which was stalled for 12-13 years is easing, UCBs are treated on par with the Guarantee scheme of small and medium enterprises, etc, underlined Mehta.
The Nafcub President also quoted extensively from Union Minister Amit Shah’s speech given during
Of the 1534 UCBs, there are 864 in Tier 1 (business limit of Rs 100 crore) and 688 in Tier 2. And among these 550 are unit banks, having a single branch. There is a need for us to introspect as our gross NPA is 11.6% and net NPA is 4.6% which is higher than that of commercial banks which have gross NPA 7.3% and Net NPA 2.4%.
“Despite having close to 200 UCBs which are more than 100 years old, we have reached out to only 69 lakh people so far. More than 80 UCBs have negative growth. This AGM should think of devise ways and means to raise our canvass, identify our challenges and strategize our growth”, said Mehta adding that Amit Shah has said clearly that for inclusive growth of society only co-op can be a medium. Shah dreams of having an UCB in each town and this is not impossible, Mehta said.
Speaking on this occasion H K Patil congratulated Mehta and his team for making the idea of an umbrella organization almost a reality. We need to lend financial strength to it now and the next AGM is going to be special as we will have our dream come true in the shape of UO, said Patil.
Several delegates from across states talked about the high-handed attitude of the RBI inspectors and wanted Nafcub to intervene in the matter. The Kerala delegate wanted more time for the conduct of AGM.
Nafcub Vice President Vidyadhar Anaskar proposed a vote of thanks and promised to hold an AGM of a longer duration.
