In a landmark development for the urban cooperative banking sector, the National Urban Cooperative Finance and Development Corporation (NUCFDC) is set to be formally inaugurated on March 2, 2024.
This pivotal event, taking place at Vigyan Bhavan, will be graced by the presence of Union Home and Cooperation Minister, Amit Shah, along with the awaited confirmation of the Governor of the Reserve Bank of India, Shaktikanta Das.
Jyotindra Mehta, Chairman of NUCFDC, expressed his elation as the Reserve Bank of India finally issued the much-anticipated Certificate of Registration to NUCFDC, enabling it to function as a Non-Banking Financial Company (NBFC) and serve as the umbrella organization for the sector. With a share capital of Rs. 117 crore initially subscribed by urban banks, NUCFDC has been empowered to provide essential fund-based and non-fund-based support to urban cooperative banks (UCBs).
The concept of an umbrella organization for cooperative banks has been a longstanding discussion, with inspiration drawn from successful models in countries like the Netherlands, Finland, and Germany. Following RBI’s encouragement and guidance, the National Federation of Urban Cooperative Banks and Credit Societies Ltd. (NAFCUB) submitted a proposal, leading to the establishment of NUCFDC.
NUCFDC’s role as an Umbrella Organization (UO) for the urban cooperative banking sector is underscored by its provision of various specialized functions and services, acting as a bridge between banks and regulators. Moreover, it will operate as a self-regulatory organization (SRO) for the sector, promoting efficient and compliant operations among member UCBs.
Mehta emphasized the importance of cooperation among cooperatives, stressing the need for mutual trust, solidarity, and shared responsibility among UCBs. He highlighted the institution’s potential to enhance efficiency, competitiveness, and IT capabilities within the sector, thereby bolstering public confidence.
The management of NUCFDC, comprising a Board of Directors and CEO selected based on RBI’s fit and proper criteria, is poised to oversee its day-to-day operations. With a focus on technology-driven solutions, NUCFDC aims to provide state-of-the-art IT support accessible even to smaller UCBs.
Mr. Mehta extended gratitude to the Government of India, particularly Honorable Union Home & Cooperation Minister Shri Amit Shah, and the Ministry of Cooperation for their unwavering support. He also acknowledged the encouragement and keen interest shown by RBI Governor Shri Shaktikanta Das and senior officials throughout the formation and operationalization of NUCFDC.
The launch of NUCFDC marks a significant milestone in the evolution of the urban cooperative banking sector, heralding a new era of collaboration, innovation, and resilience.