Soon after the registration of the umbrella organization for urban cooperative banks as Apex Coop Finance and Development Ltd (ACFDL), the Nafcub team led by its President Jyotindra Mehta got down to the nitty- gritty of the new entity.
“There are some technicities to be fulfilled yet”, said Mehta reacting to the development. The proposed UO has to be finally a NBFC entity and preparation for registering it under NBFC is afoot, Indian Cooperative has gathered.
The NBFC licence is given by RBI and one has to fulfil many conditions before that, explained Mehta. Presently, we are working out the business proposal to be sent to RBI for securing licence as an NBFC body, he underlined.
The business proposal has to enumerate the kinds of business the new UO registered as Apex Coop Finance and Development Ltd (ACFDL) will do after securing the licence. RBI vets each and every point minutely, said one of the co-operators associated with the UCB sector.
It bears recall that Nafcub, which first tried to get the UO registered under Co-op Act had to finally give in before the RBI which cited the lack of resolution mechanism under the Co-op Act as a reason for not accepting the proposal. “Since UO was more important than anything else, we agreed”, confirmed Mehta.
Raising capital is going to be the next big challenge for the Apex Coop Finance and Development Ltd after the licence from RBI is acquired. Though as a company this new body can raise money from the private sector also, Mehta says there is no plan to do so as of now.
We would raise the money from the cooperative fold only and we are also confident that players of the sector would come forward to pledge funds, Mehta stated.
It may be noted that the new entity known as Apex Coop Finance and Development Limited” was registered under the Company Act last week.
Hailing the development, the apex body of UCBs’ Nafcub wrote on social media “Long awaited dream of formation of an Umbrella Organisation for UCBs was fulfilled on April 18, 2020 when Ministry of Corporate Affairs, Government of India granted Certificate of Incorporation”.
Nafcub also exhorted members to be part of the entity sooner than later. “The whole cooperative sector needs to be brought under the umbrella as soon as possible”, it said.