On the sidelines of the meeting of members drafting the National Cooperative Policy with RBI Governor Shaktikanta Das on Friday last week, Nafcub President Jyotindra Mehta raised several issues related to the Urban Cooperative Banking sector.
The issues raised by Mehta with the RBI governor include Priority Sector Lending, Umbrella Organization, license to new UCBs and others.
Soon after the meeting, the official twitter handle of Nafcub wrote, “Chairman and committee members of National co-operative policy met Governor RBI in Mumbai. Discussed issues related to the UCB sector”.
The issue of priority sector lending has become the most challenging especially for those UCBs that fall under Tier-2 and Tier 3.
About 100 UCBs may lose licenses in the next one year on account of amendment in the DICGC Act for release of payment up to Rs 5 lacs. It does not give any chance for either revival or merger of the bank that will save depositors of non-insured balances in their accounts.
The other issues relate to the creation of the post of a deputy governor in RBI exclusively for cooperative banks as out of a total number of 2613 of banks in the country, 2515 are cooperative banks and 98 are all other banks put together.
Other demands include RBI should resume receiving applications for licensing of new banks by first announcing entry point norms, the urban cooperative banking sector to be given permission to also get share of government business and UCBs should have freedom like commercial banks in gold loans.