NAFCUB organizes meet of members; discusses way forward

NAFCUB recently organized a meeting of State Federations and District Associations of urban cooperative banks in New Delhi with a view to updating them with all the efforts made by the organization and on developments on the regulatory front in setting up of the Umbrella Organisation, informs a press release.

JK Dash ED RBI was the Chief Guest and Kumar Ramakrishna Dy. Secretary, Ministry of Cooperation was the Guest of Honour on this occasion.

In his opening remarks, Jyotindra Mehta, President NAFCUB thanked the Ministry of Corporation for its support as well as RBI for its positive response in resolving the matters of key concern of UCBs. Mehta appreciated them for sector friendly branch licensing policy, easing timelines of achieving Priority Sector Lending targets and other norms, making applicable new comprehensive compromise write-off settlement guidelines to UCBs also along with graded CRAR policies.

Mehta said that the UO which has been set up by the sector and was on the way to be operationalized soon will provide all the necessary wherewithal to the sector to make significant contribution in ensuring that the cooperative sector as a whole will become a major player in Indian Economy and help it become the 3rd largest one.

He appealed to the Govt and RBI to ensure that licenses of UCBs were not cancelled in a routine manner and that there was a robust mechanism to detect incipient weakness that could see that suitable course correction was made either for the bank to become healthy or for takeover by other banks. He said that NAFCUB will work with RBI & Govt. to ensure that PMC and Madhavapura like incidents never occur again. He thanked the Governor RBI for responding to NAFCUBs request immediately and posting a senior official of RBI as the dedicated Nodal Officer for the UCB sector, Mehta noted.

In his remarks, Kumar Ramkrishna, Deputy Secretary said that the government is keen to resolve all the difficulties they are facing by working in close coordination with the Finance Ministry and the RBI. He said that in the short period of two years, the Ministry has had a number of interactions with the NAFCUB and the Hon’ble Minister himself has interacted with the Federation to understand the issues of the sector as well as to convey the expectations of the Government of the sector.

Speaking on the occasion, J. K. Dash, Executive Director, RBI illustrated with facts and figures the challenges before UCBs. He cautioned them against the competition from commercial banks and other players from the financial sector. He underlined the importance of UCBs to be regulatory compliant and wanted the sector to develop a strong sense of collectiveness and bonding.

He stated that as per the latest estimates, there are 1494 UCBs as on 31st March 2023 down from 1514 a year ago. The RBI is playing an active role to ensure that UCBs prosper. But financial discipline was the key, he said.

Dash also referred to the evolution of cooperative banks and credit unions in many cooperatively advanced countries and their collective/ conglomerate approach. He said that small cooperative banks cannot stand competition on a standalone basis or be in a position to make investments to have requisite technology and therefore they had to work collectively. He sketched the importance of UO in this context.

D. Krishna, Advisor & former CE, NAFCUB made a presentation on latest developments and success of NAFCUB on resolution of issues concerning regulatory aspects of the sector. He also informed that not all issues are solved and many of the residual issues would be taken up in the ensuing Standing Advisory Committee of Reserve Bank of India.

P K. Arora, former CGM, RBI made a detailed presentation on the present status of NUCFDC. He stated that soon the NUCFDC is expected to get the “in principle” approval for Certificate of Registration from RBI as NBFC-ND, he stated.

Atul Khirwadkar, CEO, NUCFDC anchored the meeting and a Vote of thanks was proposed by Yogesh Sharma, Chief Executive, NAFCUB.