While addressing the valedictory session of a seminar for Urban Cooperative Bank (UCB) Directors at the College of Agricultural Banking (CAB) in Pune recently, RBI Deputy Governor Swaminathan J reiterated the critical role played by UCBs in India’s financial system and urged Directors to lead with stronger governance, technological foresight, and unwavering depositor trust.
“You represent a model that is built not just on profit, but on purpose,” he said, emphasizing that UCBs are uniquely positioned to serve underserved segments like small traders and the self-employed. “The Reserve Bank stands with you – as a regulator, guide, and partner,” he added.
The seminar, themed ‘Resilient Cooperatives for the Future: Enhancing Governance in a Digital Age’, comes at a time when global attention is on the cooperative sector, with the United Nations declaring 2025 as the International Year of Cooperatives.
Swaminathan noted that UCBs’ deep-rooted presence in communities makes them a vital part of India’s cooperative story. However, he cautioned that banking rests entirely on depositor trust. “Governance must be sharper, risks better understood, and technology adopted responsibly,” he stressed.
Highlighting key challenges, he outlined five critical areas where Directors must take charge: strengthening governance and accountability, empowering internal assurance functions (like audit and compliance), engaging meaningfully with auditors and RBI inspectors, adopting technology responsibly, and leveraging the Umbrella Organisation – NUCFDC – for collective strength.
Referring to the four-tier regulatory framework and revised PSL guidelines for UCBs, the Deputy Governor acknowledged steps taken by the RBI and the government. However, he asserted that “lasting progress must come from within,” calling on Directors to ensure ethical oversight and sound internal systems.
He urged Directors to treat internal and RBI inspections as opportunities for improvement, not fault-finding. He also warned against adopting digital banking without adequate technological preparedness and stressed cybersecurity as a Board-level responsibility.
On the newly formed Umbrella Organisation, he said, “It is a force multiplier for smaller UCBs, enabling shared services, capacity-building, and financial support.” Active participation, he emphasized, would ensure resilience in a fast-evolving banking landscape.
The session concluded with a call for cooperative leaders to rise to the moment: “Build institutions that are capable, compliant, and above all, worthy of depositor trust.”