The leaders of urban cooperative banks have hailed the decision of RBI to have a professional MD for the co-op banks. While some call is long due, others clarify that it affects elected Directors in no way.
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Jyotindra Mehta, Nafcub President
Giving his reaction, Nafcub President Jyotindra Mehta said, there is nothing to worry for the elected Director of UCBs in the RBI’s notification, as this is applicable only to the administrative part of the management which means MD or Whole Time Director. Notification puts no restriction on the elected Directors.
Media has somehow missed the wood and kind of sensationalized the issue. In my knowledge none of the UCBs across India have an MP or a MLA as the MD or WTD. RBI has only tried to professalize the UCBs and there is no ground for the elected directors to be concerned.
Cosmos Bank, Group Chairman, Mukund Abhyankar
This was needed for many years; but got stalled because of last year’ amendments in the BR Act, RBI could do it now. Of course, tough resistance will definitely emerge from politicians. But RBI must not go back now!
Satyaprakash Khokhara, CEO, Cooperative Bank of Rajkot
RBI’s circular dated 25.06.2021 is in the interest of depositors and other stakeholders. This will give more transparency in the banking sector and it will be beneficial to the co-operative sector as a whole. This has been my point of view.
Pune People’s Cooperative Bank, Chairman, Janardan Ranadive
It has very limited application in Maharashtra. No politician is either an MD or a WTD in Maharashtra to my knowledge. Elected Directors are not enjoying such positions of Profit.
Citizencredit Co-operative Bank, CEO, Christopher Mendoza
It is an upgrade of an earlier Circular. The intention appears to make UCBs function more professionally. MD/WTD/CEO to be more independent, responsible and Accountable. Very few banks have WTDs. The Covenants prescribed will differentiate the authorities of the elected Board and MD. However Co-operative principles and Co-operative management practices are sacrificed. RBI expects the UCBs to function like private banks.
The challenges are availability of sufficient qualified persons, accepting the changes in the true spirit by the BOD. and capabilities of RBI to decide and dispose of such a large number of applications within the time limits.
Kaijs Bank, Vice-Chairman, Chandrakant Chougule
I think there are no whole-time director concept in UCB sector except MD who is employee and not an elected member. This notification will not affect for current management structure of UCBs.
GS Mahanagar Cooperative Bank CEO, Manjunatha T Kanchan
All the actions and directions of the RBI are ultimately to bring professionalism in UCBs as some of the UCBs’ functions are detrimental to public interest. The main objective of the RBI is to protect public interest. Appointment of CEOs of UCBs has powers and responsibilities. There is a scope for UCBs functioning on par with the PVT sector or SFB.
This is the best move and master stroke by RBI
Most of the Co Op sector is dominated by political bigwigs and CEOs are working like puppets in these banks.
Even those working independently and in the interest of depositors as well as working in professionally managed banks had no platform to fight injustice inflicted on them.
They have no Labour ,Co op or High Court open to them.
Now that they are given assurance that no injustice shall happen to them and they will be heard by RBI so they can work like IAS officers and act as watchdogs on behalf of RBI
BOM members or. Statutory Auditors had such rights and without the prior approval of RBI they could not be removed from their jobs. They had the same right/ protection as given to CEOs.
This shall definitely bring professionalism from the community of CEO / GM / MD/ Dy MD / etc
Manavi UCB, CEO, Nagaraj Madival
In my view, traditionally all co-operative bank CEOs are considered employees of banks. The RBI circular removes the concept of employee of a bank. This post is now converted into corporate governance.
In fact, this is confusing decision. As per my knowledge in Maharashtra no MP, MLA or cooperators are the Managing Directors of UCBs. The media has published the news wrongly.
Jijau Commercial Cooperative Bank Chairman Er Avinash Kothale
The RBI circular issued in respect of MD is well studied so one has to be welcomed but in respect of a whole-time director the circular has not taken into consideration constitutional provisions like article 14 regarding equality. It is observed that while highly qualified people fail to develop coop banks, illiterate people have developed excellent co operative banks with honesty, integrity and social obligations.
Mohit Maski, Chairman, Suco Bank
The notification is in the right spirit but the time given for reappointment or new appointment is very less.
The control over appointment of MD will attract professionals and technocrats in the cooperative banking industry. But the question shall be with the pragmatic implementation of the same as the number of such banks will be in hundreds where RBI is lacking officers for supervision. Probably, the RBI could have done it by analysing the financials of banks on a half yearly basis and through inspection.
The direct control over the microlevel human resource management of a co-op institution will be a violation of fundamental rights of the institution based on certain well-established principles. For other classes of institutions, those kinds of instructions might be needed but the basic facts of governance of cooperative institutions may be diluted just because of the nature of business activities of such classes of cooperative institutions. This aspect will be detrimental to the growth of the entire cooperative institutions of the country.
RBI could have developed other smart mechanisms to control the business activities of this kind of cooperative sector with a beautiful matching of governance and business.
Paraspar Urban Cooperative Bank Director Sekhar Kibe
This is a good step taken by the RBI. Minimum politicisation and Maximum Professionalism is required in the Banking sector to safeguard the interest of depositors.
Janata Sahakari Bank, CEO, P S Pathania
RBI notification for appointment of MD is welcome.
Indraprastha Sehkari Bank, CEO, Rajeev Gupta
It’s a very problematic notification for the future of coop. Banks.
Cuttack Credit Cooperative Society, President, M N Nayak
I welcome this move by the RBI