A Maharashtra Cooperative Department circular asking Urban Cooperative Banks (UCBs) to join the National Urban Cooperative Finance and Development Corporation Ltd. (NUCFDC) within one month is drawing mixed reactions from the cooperative banking sector.
Issued by Cooperation Commissioner and Registrar of Cooperative Societies Deepak Tawre, the circular directed all UCBs in the state to obtain NUCFDC membership and submit compliance reports to authorities.
The circular followed a decision taken at the State Cooperative Development Corporation (SCDC) meeting held under the chairmanship of the Maharashtra Chief Secretary last month.
According to the notice, NUCFDC, set up by the Central Government and recognized by the Reserve Bank of India (RBI), will provide liquidity support, technology services, cyber security, digital banking solutions, consultancy, training and compliance assistance to cooperative banks.
While several bankers have welcomed the initiative, saying smaller UCBs need a common support institution amid rising compliance and technology costs, others believe NUCFDC membership should remain voluntary, arguing that the circular creates an impression that joining the umbrella body is compulsory, whereas cooperative banks should be free to decide based on their own business needs and regulatory requirements.
