In his first media interaction at NCUI campus in Delhi on Friday the newly elected President of NAFCUB Dr M L Abhyankar pitched for restoration of income tax exemption enjoyed by the urban cooperative banks prior to the year 2006.
Abhyankar said “Manmhoah Singh himself said when he was the then Finance minister in Narsimha Rao’s regime that urban cooperative banks are peoples’ movement and thus should be kept off the hook of income tax. But his Finance Minister P Chidamabaram has done away with the provision leading massive heartburns among us cooperators”.
Accompanied by three more newly elected Directors and the Chief Executive Subhas Gupta, Abhyankar added “unfortunately the government is not even spending the tax-money collected from us on the growth of urban cooperative bank movement. Referring to his parent bank Cosmos he said that we alone are taxed to the tune of Rs 80 crore per year.
“We cannot give more than 12 per cent of dividend. Urban cooperative banks have no godfather as is the case with sugar cooperatives. Sharad Pawar rises from time to time to save these cooperatives should the need arise”, he said.
Urban cooperative bank rose into being to help people get free of money lender’s clutches. It offers consumption loans without many formalities with just two guarantors and no mortgage. We have personal relation with customers and give as small a loan as Rs 500 or Rs 1000. Can a corporate bank give such a loan, he asked”. Yet we are meted out differential treatment as we do not have any lobby, he lamented.
There are scores of issues but I would like to focus on three important ones for today, he said taking up the second 
issue of DICGC. Government should increase Deposit Insurance coverage from existing rupees one lakh under DICGC scheme of government to rupees three to five lakes. This is a limit which was set 36 years ago. RBI must review this sooner than later as it will go a long way in safeguarding the interest of the depositors, he said.
Third point that Dr Abhyankar raised was the implementation of Malegam Committee report for the new licensing of Urban Cooperative banks as no new license has been given since 2004 debilitating the movement in a big way. Focusing on the need of more and more mahila cooperative banks he said that new UCBs should be given licence to operate in grade C and grade D cities as soon as possible.
There are 619 districts in the country out of it only 330 districts are covered with Urban cooperative banks. As a president of NAFCUB Dr. M. L. Abhyankar requested government to implement the recommendation of Malegam Committee for licensing of new urban cooperative banks. This will help to cover all the districts of the country by the urban cooperative banks. It would contribute in financial inclusion and inclusive growth of the country.
Abhayankar promised to meet the RBI governor Raghu Ram Rajan in the first week of March to stress upon the urgency of the matter. “We have sought appointment and meet him soon”, he concluded.
