In an event held to give thanks to Union Cooperation Minister Amit Shah for resolution of the issues of the UCB sector in Bharat Mandapam in Delhi on Thursday, Shah advocated the primacy of the proposed umbrella organization for the benefits of the sector and called it a game changer.
The Umbrella Organisation (UO) for Urban Cooperative Banks, set to operate as a Self-Regulatory Organization (SRO) under the purview of the RBI. The Umbrella Organisation will play a pivotal role in providing critical IT Infrastructure and Fund-based support to UCBs
Speaking at the conclave, the Cooperation Minister stressed the necessity of strengthening and modernizing Urban Cooperative Banks, preserving the spirit of cooperation. This, he suggested, could be achieved through the establishment of an Umbrella Organization. To thrive, cooperatives must uphold professionalism and adhere to financial discipline, in accordance with the Banking Regulation Act.
Shah also took a class of those who hesitate to contribute to the Umbrella Organization and said that co-op should think with a holistic mindset. “If you are not helping the UO it means you are not truly a co-op entity but a private entity with a cloak of co-operative”, Shah was brutally frank when he mentioned that Jyotindra Mama is petitioning everyone for funds.
“Jyotindra Mama is asking you all for contributions for the UO but if the support is not coming, it’s not good. This UO is not for you and me but for the millions of small share-holders who have put their money in the UCB sector. If one is in a co-operative, one has no right to think of only himself or his organization but he will have to think for the entire sector”, said Shah in an impassioned tone.
The statement of Shah was meaningful in the sense that the Indian Cooperative has gathered that some of the bigger UCBs are hesitating to contribute the way they should have done. A highly placed source in NAFCUB said that those banks which can easily contribute Rs 40 crores are not giving more than Rs 10 crores. Some of them are even demanding a Board position in the newly formed NUCFDC.
In the same meeting Umbrella Organization CEO Atul Khirwadkar clearly explained the importance of the UO even for bigger banks. He underlined that UO is not only meant for small banks but it would also cater to capital needs, liquidity issues and asset management of the bigger UCBs. “UO’s main aim is to raise your bottom-line and help you earn more”, added the CEO.
Shah in his speech also said that NAFCUB to lead initiatives in the housing sector, with the Umbrella Organisation poised to serve as a pivotal clearing house. He emphasized that UCBs must adopt “cooperation amongst cooperatives”.
Jyotindra Mehta, President of NAFCUB, praised Amit Shah and recounted the positive changes he has brought about, especially in the urban cooperative credit. “Amitbhai is a committed grassroots level co-operator with a desire to bring the cooperative sector of the country to occupy an important position in our economy” stated Mehta.
The failure of UCB even after removal dual control is matter of concern. The amalgamation scheme of PMC bank is template to set example that frauders can loot bank under RBI supervisin and depositors have to bail in to keep bank running. All leaders of co-operative hzve fsiled to give justice to inocent depositors