Veteran cooperator and former President of Sahakar Bharati Satish Marathe has raised a debate on social media about the future of urban cooperative banks and credit cooperative societies. While several of his friends on Facebook agreed with him, there were some who thought it unrealistic.
Marathe worte “Small Finance Banks ( SFBs) and Payment Banks (PBs) together will open about 3600 Branches in the very first year of operation. Collectively, SFBs and PBs would bring in Rs 7400 crore as capital.
Entry of these new categories of banks will be a big threat to the existing Urban Co-op Banks.
Unless the UCBs quickly refashion their internal working, reduce operating costs, improve productivity, concentrate on capacity building, fully harness technology and particularly make available emerging payment gateways eg IMPs ( Mobile Payment ), e- Wallets, Internet access, etc , there is every chance of UCBs losing a large chunk of their secure and profitable business.
Business of the well run Dist Central Banks and large Credit Co-operative societies will also be affected by the entry of these new banks, particularly SFBs.
It is a wake-up call for the Co-Op Banking Sector.”
Kashinath Ranade, one of Marathe’s friends says “Just see the history some of the known co-op banks that are under moratorium. Some are struggling to remain under RBI’s norms for payment of dividend to share holders and adopting various tactics to remain within RBI’s norms.
Another friend Makarand Khanolkar felt “I honestly think that this is a pseudo threat. Neither the SFBs nor PBs nor Post offices would be able to provide the service a Co-op Bank does. Yes, I do agree that more transparency is required for survival in the Banking Sector.
Agreeing to Marathe’s point of view one of his FB friends wrote” Add to it the proposal of post office getting converted into banks. With their ubiquitous presence in villages, UCB may become an endangered species.”
