While the whole world is complaining against Urban Cooperative banks style of functioning ,NAFCUB Chairman H K Patil has words of encouragement for them and compares them better than commercial bank in terms of financial inclusion.
Talking on the eve of Federation’s 35th Annual General Meeting in New Delhi Mr Patil said that in the year 2010-2011 the deposits of urban cooperative banks increased at the rate of 14.8% while the advances grew at 22.4%.
These figures compare well with the corresponding figures of commercial banks at 15.4% and 20.1% respectively.He said that CRAR of 91% of the Urban Cooperative Banks is more than 9%, making the sector well capitalized by and large.
Mr Patil observed that NAFCUB’ s interactions with the Reserve Bank of India during the year under report had been very fruitful. As a result, RBI had issued a number of circulars, particularly to augment urban banks’ role in financial inclusion and had also made favourable policy announcements.
The Report of the Malegam Committee on licensing of new Urban Cooperative Banks, constituted on the demand of NAFCUB, Shri Patil informed has been put in the public domain for comments. The Report, he said, has also made very important recommendations on the issue of Umbrella Organization for providing financial and other support to small urban cooperative banks.
The Government’s approach to the sector, however, he said has remained at best indifferent. Despite repeated memorandums on the adverse impact of Direct Tax Code on Urban Cooperative Banks and even small urban cooperative credit societies, the Government has not taken cognizance of the problem that the new Tax Code would create for the sector.
The sector, he said, was also worried on account of the sweeping powers proposed to be given to the Registrar of Cooperative Societies under Multi State Cooperative Societies Act Amendment Bill, without due consultation with the sector.
He said that RBI has recognized the fact that urban cooperative banks have been the earliest purveyors of financial inclusion as the very foundation of cooperative credit movement was based on the concept of support to less privileged sections of society.
In this context, NAFCUB, in December last, had launched a nationwide scheme for providing CBS on ASP model to small urban cooperative banks at affordable cost so that these banks are able to provide the same services to their clients as large commercial banks are providing and are able to increase their thrust towards financial inclusion.
NAFCUB has also launched a Research Scheme for promoting research on Urban Cooperative Banks and to involve youth in the movement. Under this scheme Research Scholars enrolled for Ph.D/M.Phil with UGC recognized Universities are provided scholarship for their research work.
He termed cooperative credit societies as very important financial intermediaries that were doing important work of providing financial services to unorganized sector and they had great potential to do more given proper support from the authorities.
