The apex body of cooperatives NCUI has opposed the RBI proposal to convert Urban Cooperative Bank into small finance banks.
A press release sent to Indian Cooperative by NCUI reads, “The apex organization of the cooperative movement is not supportive of RBI’s proposal to covert urban cooperative banks into small finance banks as seen in the recent RBI in-principle approval to Shivalik Mercantile Bank to convert into a small fiancé bank”.
NCUI Chief Executive N Satya Narayana said, “The proposal of RBI for converting urban cooperative banks into small finance banks will hamper the growth of the cooperative movement”.
“This will further widen the already existing disparities in income which will be detrimental to the socio-economic growth of the country. The urban cooperative banks must realize that opting for private option may not be a solution for all problems, he underlined.
Satyanarayana added that, “Many of the urban cooperative banks have succeeded by diligently following cooperative principles and values. RBI must evolve a strong monitoring mechanism so that urban cooperative banks do not fall”.
The press release further reads that, “RBI in September, 2019 had come out with a scheme for voluntary transition of primary urban cooperative banks into small finance banks, for which Shivalik Mercantile Bank had applied”.
It may be recalled here that NCUI and other cooperative organizations like Sahakar Bharti, NAFCUB, Saraswat Cooperative Bank had opposed RBI’s acceptance of the recommendations of the Gandhi Committee on voluntary conversion of urban cooperative banks into small finance banks.