In a letter written to Shaktikanta Das Governor of RBI, Sahakar Bharati National President and National Convener (UCB Cell) Ramesh Vaidya and Sanjay Birla respectively have urged him to formulate and notify Fit and Proper Norms for a Shareholder of an UCB to be eligible to be elected as Director.
The letter refers to a discussion of Satish Marathe with the RBI Governor held earlier on the issue and suggests way out of the BoM imbroglio in practical terms. The letter reads “based on the feedback received by us from Shri Marathe on his discussion with you on the issue, we have to suggest as follows
1A. Please formulate and notify Fit and Proper Norms for a Shareholder of an UCB to be eligible to be elected as Director.
1B. These Fit and Proper Norms be communicated to State and Central Registrars of CoOp Socs and they in turn be directed to advise UCBs to incorporate the same in the Bye Laws of UCBs.
1C. The above matter be also considered at the level of State and Central TAFCUBs, and
2. RBI to direct all C and D rated UCBs to constitute Board of Management.
The letter also introduces Sahakar Bharati as an all India organization committed to promoting the cooperative movement in the country. “We are the largest non-governmental organisation working in the field of cooperatives and with units in over 400 Districts of the Country”, the letter reads.
“More than 20,000 cooperatives from all Sectors of the Cooperative Movement, including Urban Cooperative Banks, are associated to Sahakar Bharati”, the letter claims.
It bears recall that the entire Co-op Banking Sector continues to be strongly apprehensive and opposed to the concept of two bodies viz Board of Directors and Board of Management managing the affairs of an UCB.
The letter also appreciates the concerns of RBI on the safety of depositors’ money and says that the RBI is empowered under the Banking Regulation Act to take the above steps to protect the interests of the Depositors and to maintain Stability and Sanctity of the Financial System.
“We appreciate the concerns of the RBI and as a risk mitigation exercise, we have suggested the above on a trial basis and we feel confident that the above suggestions will go a long way in professionalizing the operations of UCBs and protect the interests of the Depositors”, the letter concludes.