Sharing his practical experiences from the ground level in the Session- Corporate Governance & Professionalism in Urban Cooperative Banks, Gautam Thakur, Chairman of India’s largest Urban Cooperative Bank, Saraswat Bank, said at the Co-op Kumbh held at Vigyan Bhawan, New Delhi, on Monday that the ultimate responsibility for good governance rests on the quality of the Board. “The more diversified the Board, the better the governance,” he asserted.
Highlighting a key distinction between corporates and cooperatives, Thakur said that while in the corporate world Board members are selected, in cooperatives they are elected. “Here lies the catch-what kind of Board is being elected?” he remarked.
Advocating for diversity, Thakur emphasized that a Board should consist of members from varied professional backgrounds such as Bankers, Chartered Accountants, Auditors, and Entrepreneurs. “If a Board is dominated by a single category of members, it can lead to imbalance. I have seen Boards fail when they were composed only of auditors,” he cautioned.
Thakur further underlined the importance of constituting Domain Committees with relevant experts to strengthen governance. “At Saraswat Bank, we have committees for each domain, and they usually deliver the best possible solutions. We ensure there is no overlap-for example, a member of the Credit Committee focuses only on credit matters,” he said.
Unlike corporates, UCBs do not have independent directors but have a Board of Management (BoM). Warning against filling the BoM with loyalists, Thakur said, “We must have truly independent minds to offer neutral and rational solutions, not just convenient answers.” Citing Saraswat Bank’s example, he noted that its BoM includes professionals who have worked with the SBI, HDFC, and Axis Bank. “Such dignitaries lend great value to financial decision-making,” he added.
The Saraswat Bank Chairman also stressed the need to invest in human capital and cultivate a performance-driven culture in cooperative banking. “We send our staff to IIMs to ensure our decisions are industry-relevant. We also plan to send many to the upcoming Tribhuvan Sahakar University,” he informed.
“It’s entirely up to us to adopt best practices- the quality of the Board makes a world of difference,” Thakur said, emphasizing that Boards must focus on the organization’s long-term welfare rather than short-term gains. “A responsible Board with a long-term vision is what truly makes the difference,” he added.
Praising the RBI for its proactive approach, Thakur urged UCBs to stop complaining and start thinking big. “Thinking big can take you to the big league,” he said, drawing an analogy to T20 cricket.
He also lauded the Umbrella Organization (UO), saying that many of its initiatives will transform the UCB landscape. His only suggestion was to design digital solutions best suited to cooperative banks. “Like the different parts of a bicycle that must work in sync for a smooth ride, our systems too should function cohesively,” he explained.
Extending support to Union Home and Cooperation Minister Amit Shah’s call for setting up a UCB in every town, Thakur pledged full cooperation. He also hinted that Saraswat Bank may soon cross the Rs 1 lakh crore mark in business.
Cyclewala no need of to change engine oil like a Scooty. Urban banks, PACS, DCCBs working without risks of FOREX, is n’t these institutions need to maintain CRAR like HDFC Bank. These institutions doing local business. They sanctions loans after mortgage. In some of states, LONG TERM Loans also sanctioned by SHORT TERM Credit institutions. For Long Term credit 5%of Share Capital is enough as per NABARD loan Policy. But Inspecting Officer noting the defect in CRAR Maintenance if it decreases <9%. These credit portfolio i. e. Long Term loans may be permitted to assess CRAR @5%.The PRIMARY INSTITUTION PACS needed to get their Interest Incentives directly through their CBS Like commercial banks without intervention of APEX BODIES.