A top ranking RBI functionary has said the whole regulatory framework governing large urban cooperative banks needs to be revisited considering they have undergone a fundamental shift in terms of size and complexity of their business operations.
It bears mention that the Saraswat cooperative bank has over the last few years been trying to convert itself into a private commercial bank but to no avail.
Talking to the Indian Cooperative, the largest UCB’s Chairman Mr Eknath Thakur said earlier that after a certain point the existing framework does not offer scope of growth and thus this bid to break-free of cooperative tag.
The issue should be discussed and necessary legal steps taken to allow the banks to convert themselves into private commercial banks, he underscored. He was addressing the conference on the UCBs in Ahmadabad.
The apex bank official added removing the existing restrictive norms and liberalizing the atmosphere would undoubtedly promote the smooth and non-disruptive growth of the cooperating banking sector.
As per the RBI data, the number of the financially weak Ucbs has been on the decline and their deposits and advances have been on the incline.
Sources say the idea of an umbrella organisation as advocated by the RBI official would do an immense amount of good to the Ucbs. This body could give them liquidity support as well as other important services they need, add sources.