Maharashtra based Yavatmal Urban Cooperative Bank Chairman Ajay Vithaldas said that the RBI is imposing the rules of State Bank of India on the Urban Cooperative Banks in the context of the interest paid by the UCBs to customers on their deposits.
“A restriction has been imposed on UCBs for not paying interest rate on deposits more than SBI. The interest rates of SBI are decided on the basis of their financial parameters. Due to lower interest rates Urban Cooperative Banks are facing issues and the deposits of these banks are decreasing significantly.”, said Vithaldas while presenting his views during the 47th Annual General meeting of the Nafcub held recently.
He demanded that, the restriction on giving interest on deposits on the lines of SBI should be lifted or permission should be given to give interest rate by at least 1 percent more.
The Yavatmal UCB Chairman further demanded that the Urban Cooperative Banks should be allowed to transfer securities from HTM to AFS and from AFS to HTM in every quarter.
He further said, “Credit information companies are not updating the credit status (CIBIL) of the borrowers promptly, due to which there is delay in providing loan facilities to the customers of urban cooperative banks. Necessary instructions should be given to improve the functioning of the above-mentioned companies”.
“Our government is focusing on cashless economy digitalization, but due to FMSW restriction, co-operative banks are unable to meet the government standards. In the wake of this, the urban cooperative banks can’t give benefits to the customers from such government schemes like PMAY”, he added.
Vithaldas said, due to shortage of judges in fast track courts, there is a long delay in recovery proceedings. It is necessary to appoint more judges in D.R.T. Courts.
He demanded that under DICGC, premium be paid on the entire deposited amount. But the claim is only given up to Rs 5.00 lakh. If the premium amount is increased from Rs 5.00 lakh to Rs. 25 lakh then the trust of customers on Urban Cooperative Banks will increase.