Indian cooperative correspondent Rohit Gupta recently interviewed Ex-Chairman of Rajkot Nagrik Sahakari Bank and currently the President of Sahakar Bharati and NAFCUB Jyotindrabhai Mehta in Rajkot, Gujarat. A versatile personality, Mehta is respected by his opponents also for his suave and dignified conduct. Mild mannered with steely determination Jyotindrabhai is also a govt nominee in the Governing Council of national apex body NCUI. Though NCUI Board is dominated by non-BJP cooperators Mehta has smooth sailing as he believes in the principle that a cooperator is first a cooperator before being anything. Enjoying a unique chemistry of relationship with NCUI President and other Board members Mehta is often seen as one of the finest examples of a true cooperator.
Some excerpts of the interview:
Indian Cooperative: When was Rajkot Nagrik Sahakari Bank established and what has been its guiding philosophy?
Jyotindrabhai Mehta: Rajkot Nagarik Sahakari Bank was established on 5th October 1953 with a share capital of Rs 1800 and membership of 59 persons under the leadership of late Keshavlal Amrutlal Parekh as Chairman. The bank members included two government servants; one teacher, one representative from small industry. We didn’t take any money from big industrialists or from Governments.
Our mission statement is “Chota Logon ki Baddi Bank”. Rajkot Nagrik Sahakri Bank has 36 branches out of which 26 branches have their own premises. We have also installed round the clock ATM at 16 branches and 1 offsite ATM.
Indian Cooperative: What challenges have you faced so far in engineering its growth?
Jyotindrabhai Mehta: The unique experience which I want to share with you, in 1992 Rajkot based Vijay Commercial Coop Bank got sick because of mismanagement, non professional approach and was therefore shut down for six months. All banks of the Saurashtra region came together. We thought if one bank got shut down then the credibility of other banks would also get affected.
At the time, no bank was able to provide financial assistance. We made a proposal before the government and the RBI and the Rajkot Nagrik Sahakari Bank took the administration of Vijay Commercial Coop Bank. I was on the board and I was appointed as chairman of administrative committee at the time. Vijay Commercial Cooperative bank NPA was 92 percent. Because of liquidity crunch bank was shut down.
At that time, Rajkot Nagrik Sahkari Bank has sanctioned Rs 2 crore to it and about 1 crore as a soft loan but we started the administrator process and the bank’s name was changed to “Rajkot Nagrik Sahakari Bank, Administrator Vijay Commercial Coop Bank”.
Under the new banner of Rajkot Nagrik Sahakari Bank the psychology of people changed and in the next four years the bank’s financial position improved but how we could do it was a very interesting story.
As per the Gujarat Cooperative Act, the administrator period had to be four years. After this period, we had a meeting of shareholders and the New AGM called and election held. In consequence, the bank could begin performing smoothly.
The bank has now its own building and it does not have to pay house rent any longer. This was a challenge and a unique experience overcoming it.
Indian Cooperative: Tell us about the goals and targets you have set for the coming years?
Jyotindrabhai Mehta: With technology up-gradation in progress over the last few years, computerization has become much faster in our bank than in other public sector banks. Mobile Banking has begun in a big way.
Bill Gates says the present banks are dinosaurs of the future; there would be banking but no bank. In fact, more than
Now, banking culture has changed and gone technological. If banks cannot provide technology then they cannot move forward.
Indian Cooperative: How much profit has your bank earned in the last fiscal 2015-2016?
Jyotindrabhai Mehta: Our bank has earned a net profit of Rs 55 crore in the last financial year.
The Bank has been enjoying the status of a scheduled bank since 1989. In the year 2001, the Bank was registered under the Multi State Cooperative Society Act and opened a branch in Mumbai becoming a Multi State Scheduled Cooperative Bank.
Indian Cooperative: Should Income Tax Burden on cooperative banks be withdrawn?
Jyotindrabhai Mehta: The government should remove or give some relaxation on Income Tax in the cooperative Sector. There are three types of banks PSUs Banks, Private Banks and Cooperative Banks. While the PSUs get capital directly from the Government, the private Sector banks get it from the market where as the cooperative banks get it from the general public known as shareholders.
That’s why our demand is legitimate. We are working on liberal norms and working at the grass roots level. We don’t want any kind of capital from the government.
Indian Cooperative: Is your bank also giving loans to Directors?
Jyotindrabhai Mehta: Our bank is not giving any loans to directors because it is against the RBI norms. But I am of the view that Bank directors should get unsecured loans.
Indian Cooperative: How many members are connected with your bank and how much dividend your bank is giving to the member societies.
Jyotindrabhai Mehta: Presently, we are having 2,69,989 members and we are giving 20 percent dividend to our members.
Presently, the Bank has a share capital of Rs7,16,913, reserves 43,88,336, deposits 3,64,30,100 and advances 2,21,03,818.
Indian Cooperative: What facilities you are providing to your depositors?
Jyotindrabhai Mehta: Our bank has established Core Banking Service with “Fincore” software in the year 2011-12 and all our branches offer banking services for our customers.
Indian Cooperative: What are the benefits in the interest of members?
Jyotindrabhai Mehta: The bank has provided free insurance cover for more than 2,00,000 members of the bank in the age groups of 18 to 70 years under an accident insurance policy of Rs.10000. This is over & above the insurance cover available to “Saving and Current” A/C customers.
