Despite opposition to RBI’s Deputy Governor R Gandhi recommendations for conversion of urban cooperative banks into commercial entities, a cautious exercise is afoot among the bigger players to weigh the pros and cons of the proposal.
Talking to Indian Cooperative, Mr Mukund Abhyankar, NAFUB President and the only visible face of Cosmos Cooperative Bank-the second largest bank after Saraswat Bank said ” we are following what is known as wait and watch policy.” he said.
The proposal is still pending with the RBI and it will take another year and a half before the required amendment, stipulated norms and other details would emerge, underlined Abhyankar.
Readers would note that the Reserve Bank of India (RBI) has submitted recommendations calling for conversion of banks doing Rs 20,000 crore business into commercial ones.
Co-operators have argued that Urban Coop Banks should be allowed to grow to their full potential and restrictions should not be imposed on their aspirations. Satish Marathe earlier wrote to the Prime Minister “We are in favour of not only Licensing of new Urban Co Op Banks but also the RBI liberalizing the regulatory framework for Urban Co Op Banks that fall under the category of Financially Sound and Well Managed Banks.” he said.
The limiting factor for UCBs has been that they cannot participate into 12 core business activities owing to the tag ‘ cooperative’ such as road constructions, offering bank guarantees and other things.
“But we are watching the’ Big brother’, Abhyankar told referring to Saraswat Bank. We are worth Rs 26 thousand crore while Saraswat Bank’s turnover is touching Rs 43 thousand crore. We are keenly watching their moves”, he added.
Readers would note that it was during the tenure of late Eknath Thakur that Saraswat Bank entertained the idea of converting into a commercial entity. He had mostly the retired commercial banks’ honchos on the Saraswat Board who had an intense desire to get back to the old fold by converting UCBs into commercial units, revealed one of the experts of Urban Cooperative banks to this correspondent.
But now things have changed. The new Chairman Mr Sakhorkar and the new Board are yet to speak their mind. Efforts to contact the Chairman have been to no avail.
