Following the promise made recently by RBI Governor Shaktikanta Das, RBI announced on Monday the constitution of an Expert Committee on UCBs, which will be chaired by N S Vishwanathan, Former Deputy Governor.
There is also a representative in the Expert Committee from the co-operative sector. Nafcub President Jyotindra Mehta has been made as one of the members in the committee.
The committee comprises Chairman, six members and a convenor. Besides Vishwanathan, Harsh Kumar Bhanwala, the former Chairman of NABARD, Mukund M Chitale Chartered Accountant, retired IAS officers NC Muniyappa and RN Joshi IAS (Retired), Prof MS Sriram, IIM Bangalore, Jyotindra M. Mehta- President of NAFCUB (National Federation of Urban Cooperative Banks and Credit Societies) are the members and Neeraj Nigam- Chief General Manager-in-Charge of RBI’s Department of Regulation is convenor.
According to a press release issued by RBI, “As part of the Statement on Developmental and Regulatory Policies released along with the Monetary Policy Statement on February 05, 2021, the Reserve Bank has announced setting up of an Expert Committee on UCBs to examine the issues and to provide a road map for strengthening the sector, leveraging on the recent amendments to Banking Regulation Act, 1949 (As Applicable to Cooperative Societies)”.
The Terms of Reference (ToR) of the committee will be to Take stock of the regulatory measures taken by the Reserve Bank and other authorities in respect of UCBs and assess their impact over the last five years to identify key constraints and enablers, if any, in fulfilment of their socio-economic objective.
The release further said “Review the current Regulatory/Supervisory approach and recommend suitable measures/changes to strengthen the sector, taking into account recent amendments to the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies). Suggest effective measures for faster rehabilitation / resolution of UCBs and assess potential for consolidation in the sector. Consider the need for differential regulations and examine prospects to allow more leeway in permissible activities for UCBs with a view to enhance their resilience.”
The Committee will submit its report within three months from the date of its first meeting. The Department of Regulation (DoR) will provide the necessary secretarial assistance to the Committee, the release added.
The leadership of urban cooperative banks have however reacted differently to the announcement. While some have welcomed the move, there are many others who resent the presence of just one member from their fraternity.