The Reserve Bank of India (RBI), Jaipur, organized the 7th Quarterly Meeting with representatives of Urban Cooperative Banks (UCBs) and State Federations from the Northern Region on Friday.
The objective of the meeting was to create a collaborative platform for discussing regulatory, operational, and governance-related challenges currently being faced by UCBs across northern Indian states.
The meeting was chaired by Navin Nambiyar, Regional Director, RBI (North Region), and saw the presence of senior RBI officials including Smt. Scenta Joy, Chief General Manager, RBI (Mumbai). Representatives and Chairpersons from State Federations of Punjab, Delhi, Uttar Pradesh, and Rajasthan attended the meeting, along with delegates from several Urban Cooperative Banks across the region.
Sharing insights from the meeting, Mohan Parashar, Chairman of the Rajasthan Federation of Urban Cooperative Banks, highlighted that several critical issues relevant to the UCB sector were addressed.
Among the key concerns raised was the ongoing recruitment freeze in Rajasthan’s UCBs, which has been impacting operational efficiency and expansion. Parashar emphasized the need to allow fresh hiring to ensure that the banks can meet the growing demands of their customers.
In addition, Parashar pushed for increasing the credit limits for housing and commercial loans in view of inflationary trends and rising urban demands. He also raised governance-related concerns, particularly regarding lending norms to board directors, stressing the need for stricter regulatory oversight and clarity.
Several other important issues were discussed by participants, including the demand to reconsider the high priority sector lending (PSL) obligations towards weaker sections, which many banks find difficult to meet under current conditions.
Concerns were also voiced regarding the public disclosure of penalties imposed on cooperative banks, with a suggestion that such information should be communicated more discreetly to avoid reputational harm.
A notable suggestion was made that shareholders should continue to receive dividends even when banks transition from the Supervisory Action Framework (SAF) to the Prompt Corrective Action (PCA) framework, in order to maintain investor confidence and morale.
The RBI officials assured the attendees of continued engagement and support. Participants appreciated the Reserve Bank’s initiative in organizing such productive regional interactions and called for more frequent meetings to strengthen the cooperative banking ecosystem across northern India.