Italian co-op bank to shade its co-op character

It seems the story of cooperative bank not working according to the expectations of their members is not unique to India but is a phenomenon common in many other countries. After the experience of England, the Italian popolari cooperative banking sector is hogging media headlines for all the wrong reasons.

Reuters reports that the Bank of Italy backed the government’s plans to overhaul the so-called “popolari” cooperative banking sector, saying the reform could not be delayed dismissing calls from the sector for limits on the size of shareholdings in the banks.

Sources say setting limits on the size of shareholdings, which some executives in the Popolari sector have proposed, would contradict the aim of the reform, which was aimed at opening up the banks’ capital.

Meanwhile, according to Reuters, Italian police say its tax wing is searching the offices of unlisted cooperative lender Veneto Banca as magistrates in Rome considered allegations of obstructing regulators.

Veneto Banca is one of 13 Italian lenders that since November have been under direct oversight of the European Central Bank. It is also one of Italy’s 10 largest cooperative banks, which the government has decided to turn into joint-stock companies.