Cooperators associated with Urban Cooperative Banks across the country have given mixed responses to RBI asking all banks including co-operative banks and UCBs to hold the payment of dividends for the current year. Several cooperators have hailed the decision but a few of them have called upon RBI to allow the financially sound and well-managed (FSWM) banks to pay dividend to members.
TJSB Sahakari Bank, CEO, Sunil Sathe
The present situation due to the coronavirus is extremely serious and we are wholeheartedly supporting the decision of RBI to hold the payment of dividends for the year.
It is a decision taken in the national interest. Raising capital is one of the big challenges before the bank and to hold the payment of dividend allows us to reserve the capital to make the provisions.
At present, everyone is sacrificing and maybe it’s not a big deal for members to take such a decision in the interest of the bank.
We have disbursed a 15 percent dividend to our shareholders in the last financial year. The bank had paid over Rs 17 crore as dividend to about 50k shareholders associated with the bank.
Kangra Cooperative Bank, Chairman, Laxmi Dass
We are not happy with the decision of RBI because in the current situation banks are giving the salaries to employees, even in some cases a few banks have given advance money to their employees, if everybody is getting money then why should we hold the payment of dividend of our members who play an important role in UCBs.
For instance, in 2018-19 FY year,our bank’s financial condition was not so good and we had given 15 percent dividend instead of giving 18 percent we had been disbursing since several years. At the time, it was hard for us to convince the members.
So, I urge RBI to permit those banks that are financially sound and well managed banks.
Citizencredit Cooperative Bank, CEO, Chirstopher Mendoza
We are hailing the decision of RBI which is taken in the interest of banks. It is a time of heightened uncertainty caused by the Covid-19, we will convince our shareholders during the Annual General Meeting.
I helps banks in conserving capital to retain their capacity to support the economy and absorb losses.
In the last financial year, our bank disbursed 16 percent dividend which is about Rs 3.4 crore disbursed to over 15,000 shareholders.
Kaijs Bank, Vice Chairman, CA Chandrakant Chougule
It is the right decision and a welcome step in the interest of banks. It will help us in raising the capital to make provision for absorbing losses due to the Coronavirus pandemic.
Members are the owner of the urban cooperative banks and for the survival of the banks, we are sure that they will understand the problem.
We had given 10 percent dividend to our shareholder which is about Rs 6 crore paid to 65k shareholders in the form of dividend.
Pune People’s Co-Operative Bank, Chairman, C. A. Janardan Ranadive
We are against the decision of RBI asking all banks including cooperative banks and UCBs to hold the payment of dividends for the year. RBI had to lay down some parameters before announcing the decision.
It may create a panic situation among the shareholders because if they don’t receive the dividend then why will they be our members. Shareholders may withdraw their membership .
On an average our bank disbursed over Rs 2 crore to 35k shareholders. In the last FY the bank has disbursed a 15 percent dividend.
AP Mahesh Cooperative Bank, Managing Director, Umesh Chand Asawa
RBI has taken good decisions in the wake of the current situation arising due to Coronavirus. There is a need to reserve capital.
The present situation may lead to an increase in the NPA of banks. RBI has also said, this restriction shall be reassessed by it based on the financial results of banks for the quarter ending September 30, 2020.
We are sure that after reviewing the position of UCBs, RBI will allow banks to pay the dividend to its members.
In the last financial year, our bank disbursed a 20 percent dividend which was about Rs 5 crore paid to 32,000 shareholders associated with the bank.