Referring to his interview given to the Business Line, former Chief Executive of NAFCUB D Krishna reiterated his demand to Indian Cooperative that DICGC should create a revival and merger fund.
Talking to Indian Cooperative Wednesday morning from his Delhi residence Krishna, known for his expertise in banking matters said a corpus of 10 per cent of the amount in the Deposit Insurance Fund (DIF) would prevent UCBs from going kaput.
Krishna also gave an account of the money with the DICGC and felt that it would have no problem creating a corpus fund which would act like a bull work of the banking sector against any possible financial crisis.
“DIF had a balance of Rs 93,750 crore as of March-end 2019 and the amount can comfortably take care of any eventualities”, stated Krishna.
“Instead of sitting on the fund with substantial addition to it each year, a revival and merger fund with a corpus of 10 per cent of the amount in DIF can be created, which supports banks, before they get insolvency problems”, Business Line quotes Krishna.
Nafcub has a whole list of points in which it feels the DICGC can be revamped; we have also sent the same to the Finance Minister and would share the same with you”, Krishna, known for his suave behaviour said to Indian Cooperative.
Interestingly, Krishna is the one of them, who was involved with the conceptualization of Umbrella Organization since the beginning. A banking expert in his own right Krishna had been a part of all the committees formed for the germination of this idea of UO.
Recounting his association with the N Vishwanathan Committee formed in 2006 Krishna says the committee was initially formed to solve the issues plaguing the urban cooperative banking sector. Since Umbrella was not within the scope of our study, the Vishwanathan Committee suggested that a separate committee be set up”, Krishna said.
Krishna was also part of the final committee constituted by NAFCUB in 2015 to work out the modalities of implementing Umbrella in the Indian context. The committee submitted his report in 2016 and it was this report of NAFCUB which received a mention from RBI finally.
Thus it is obvious that Krishna cannot remain unconcerned when a tragedy of PMC Bank magnitude takes place. He has been working overtime with the Nafcub President Jyotindra Mehta for quick recovery of the PMC Bank.
“The Nafcub team is working at many possible ways, simultaneously, to quickly revive the bank. The idea of Corpus Fund is one of them”, Krishna said promising to say more when concrete plans shape up.