Mr Jyotindra Mehta, Vice Chairman of Sahakar Bharati has rejected the recommendations of the RBI Panel which advocated conversion of big urban cooperative banks into regular commercial banks.
Converting cooperative banks into corporate entities would defeat the very purpose of these banks. They were envisaged to help the poor and the middle class, I strongly reject the idea, said Mehta who is a prominent cooperator from Gujarat.
Mehta is on the board of the apex national cooperative body NCUI. He is also chairman of the Gujarat urban cooperative banks federation. ”But these are my personal views as we have yet to take it up as NAFCUB” he said.
Interestingly, the Nafcub Board is meeting today and its AGM is slated for Saturday at the NCUI headquarters in Delhi. About 200 delegates are coming from across various states to take part in the AGM.
The RBI had no tool to handle large cooperative banks; they cannot allow merger of these banks as these banks are registered under the Multi State Cooperative Society Act. The RBI is also seeking amendment to the MSCS act.
According to Subhash Gupta , Chief Executive of NAFCUB, the implications of the recommendations would be clearer with time but it does seem to affect many of the large urban cooperative banks except perhaps the Saraswat Bank, Gupta added.
Mehta says it is not my concern-small bank or big bank. I am opposed to the idea of conversion. We will pass a resolution to this effect when the AGM of Gujarat Urban Co–operative Banks Federation takes place in the last week of September.
At Sahakar Bharati also we are opposed to the idea of conversion of UCBs into commercial entities, Mehta added.
Efforts to contact NAFCUB President Mukund Abhyankar failed as he sent a massage informing he would contact this correspondent later.
Opposing UCB becoming a BANK at a State Federation level is a good sign of Federations starting to take charge of Primary Cooperatives. In the same breadth the people opposing it should also confirm their firm resolve to address issue of financial mismanagements threatening the existence of the UCBs themselves.