NAFSCOB’s protest against the UCO Bank‘s attempt to denigrate Primary Agricultural Cooperative Societies has been upheld by RBI and NABARD. The strong-worded protest has led to the withdrawal of controversial advertisement.
Readers would recall that UCO Bank had published an advertisement on the backside of the Savings Bank Passbook issued by the Bank and its branches to the Savings Bank holders which read ““Reserve Bank does not regulate the activities of the PACS, as they are not covered by the Banking Regulation Act, 1949 (As applicable to Cooperative Societies), and that the deposits maintained with PACS are not insured by the Deposit Insurance and Credit Guarantee Corporation”.
In a volte face Deputy General Manager L Maurya of NABARD has informed NAFSCOB that the UCO Bank has withdrawn the controversial advt from the back page of its passbook now.
NABARD letter reads “UCO Bank vide their letter dated 7 February 2014 has informed that printing of passbooks with such information has been stopped. They have also stopped issuance of these passbooks forthwith.
NAFSCOB Managing Director Bhima Subramainyam had written letters to the cooperative fraternity highlighting the vicious role being played by the UCO Bank in weakening the Primary Cooperative Societies.
He said in his letter “It appears that since UCO Bank does not have anything to publicise about their own achievements, they have resorted to this type of advertisement, with a sole intention aimed at weakening the deposit base of PACS”.
A pained Subramaniyam had written “Prima facie, it appears the authorities of UCO Bank involved in approving such publicity do not appear to have a basic knowledge about the PACS. The PACS, grass root level organisations, are part of the federal Three Tier Short Term Cooperative Credit Structure (STCCS) in major States and two tier STCCS in India.
As long as PACS are allowed to mobilise deposits from their own members, it does not call for regulation of their activities by Reserve Bank of India (RBI). Though the deposits maintained with PACS are not insured by the Deposit Insurance and Credit Guarantee Corporation, the deposits mobilized by PACS in some States are covered under the State Deposit Guarantee Scheme and this is at par with the Deposit Guarantee Scheme of the Deposit Insurance and Credit Guarantee Corporation.