Well-known Maharashtra cooperator Subhash Mohite, while addressing the 50th AGM of NAFCUB in New Delhi, called for a more flexible and supportive regulatory framework for Urban Cooperative Banks (UCBs), stressing the need to strengthen their capital base while protecting depositors’ interests.
Importantly, Mohite suggested exploring whether Income Tax-related amounts could be utilised to strengthen the capital base of cooperative banks. Such a mechanism, if permitted, could provide additional support to UCBs facing capital constraints and help improve their financial strength.
He said large and small UCBs should not be subjected to identical regulatory requirements, as their size, resources and operational challenges differ significantly. A differentiated regulatory approach, he said, would enable genuine cooperative banks to operate and grow more effectively.
Mohite also called for a review of the Prompt Corrective Action (PCA) framework, arguing that banks should be given adequate time and opportunity to recover and improve before stringent restrictions are imposed.
