Patil lambasts tend of UCBs’ conversion; exhorts Shah to intervene

Underlining the changing theme in the context of urban co-op banks nowadays, Nafcub Chairman Emeritus H K Patil said the emphasis is being laid on the liquidation, conversion and merger of UCBs, instead of their revival. Patil was speaking at the Nafcub AGM in Delhi where he sketched vividly how the times have changed for the UCB sector.

“There was a time when we heard of people rushing to help a sinking co-op body and now the opposite is true. The erstwhile thought process that consisted in rehabilitating an ailing UCB or strengthening a poor cousin, has given way to the merger, conversion, etc.”, said Patil.

“There is a campaign going on against UCBs across the nation, with even state registrars asking sometimes if there is a co-op body which is faring badly and needs to be converted”, underlined Patil before a packed audience at the NCUI auditorium.

Calling conversion of co-op entities into private bodies an unethical act, Patil said co-op bodies are a social asset that cannot be gifted away to any private player. A UCB is created over a period of time and it has the sweat and labour of many generations, how could anybody dispose of it, he asked with a tinge of pain in his voice.

Patil also explained the working of AGMs without mincing words and said that anybody who has the clout can get the assent of the general body for conversion of a UCB into a private entity. “You all are part of the co-op body and you all know how it works, ” said Patil to the audience, which seemed to accept the truth of his words through their silence.

Patil touched on the issue of dwindling quorum and other enabling conditions which allow a powerful Chairman to transfer a UCB to some rich man. Exhorting members to be vocal on the issue, Patil said UCBs are social assets and public properties and should not be gifted away to powerful and rich men. It is like wasting decades of hard labour, he added.

Warning RBI of encouraging such practices, H K Patil said the job of the new Union Ministry of Cooperation is to defend the indefensible. Pinning his hopes on Amit Shah, Patil wanted an immediate cessation of this trend.

Though Patil did not name any bank, it bears recalling that last year Uttar Pradesh-based Shivalik Mercantile Cooperative Bank was allowed to make a transition into a Small Finance Bank (SFB) by the RBI.

Another bank based in Surat, and known as Prime Co-op Bank, which is known in UCB circles as a bank having a number of successful acquisitions of weak UCBs to its credit, is itself preparing to leave the UCB fold.