Page 22 - Banking Finance August 2020

CO-OPERATIVE BANK NEWS

Rs 50,000 crore in the next five years tural credit. The DCBs with the net- UCBs have to be prepared
with a moderate growth rate of 8 per work of PACS in each district, once pro-
cent. vided efficient service in the rural hin- for branchless banking:
terland by providing timely short-terms Amin
The Yogi Adityanath government, soon
after coming to power in March 2017, crop loans to the farmers apart from Gujarat State Cooperative Union held
had taken up the task of revival of the offering deposit facilities. The DCBs, a banking webinar on "Challenges,
DCBs and had set up an expert com- which get the refinance from the Na- Changes and Changes Post Covid -19"
mittee to suggest the measures. Sev- tional Agriculture Bank for Rural De- recently which was presided over by
eral states like Kerala, Andhra Pradesh velopment (NABARD) gradually failed Ghanshyambhai Amin, Chairman of the
and Telangana have already merged to match up to modern banking. Gujarat state cooperative union.
the DCBs with the apex cooperative Meanwhile, the process to recapitalise Sharing his own experiences with re-
bank in their respective states. and modernise these co-operative gard to the changes in banking tech-
banks had been underway already, nology Amin recalled that as the Chair-
Most of the DCBs are struggling for sur- man of Cooperative Bank of India, he
vival due to poor credit recovery. Amid with the state earlier announcing to had arranged a visit to Sweden for the
the ongoing process of consolidation in infuse fresh capital into 16 ailing DCBs delegates of the country and held a
the public sector banks by the Centre, operating in Faizabad, Shravasti, Banking Seminar there.
the expert panel has suggested creation Allahabad, Sitapur, Hardoi, Azamgarh,
of a single state controlled lender in the Fatehpur, Gorakhpur, Basti, Ballia, Recalling the take aways from the COB
cooperative sector in the state by merg- Siddharthnagar, Deoria, Sultanpur, seminar, Amin said the time has come
ing all the DCBs with the UPCB. Jaunpur, Ghazipur and Bahraich dis- for Branchless Banking. "Responding
tricts. to the need of the time, Urban Coop-
"Our report has been submitted to the erative Banks also will have to embark
state government for taking the final In the past, these 16 DCBs had been upon the latest technology by way of
call on the proposed merger," a mem- served notices by the Reserve Bank of the up-gradation so the customers can
India (RBI) for failing to adhere to the
ber of the panel said and added, "The be attracted by way of catering the
COVID-19 lockdown had delayed the financial and licensing norms. How- latest services and protecting them
whole process," ever, the licences were given to them from the cyber hackers", Amin stated.
later.
There is proposal to merge UP Coop- The Urban Cooperative Banks will have
erative Bank (UPCB), UP Sahkari Gram The NABARD had suspended the refi- to be efficient and professional bank-
Vikas Bank (UPSGVB) and 50 district nance facility to several DCBs follow- ers to withstand and survive the stiff
ing their failure to meet the credit re-
co-operative banks (DCBs). competition in the banking sector, he
covery targets. Several DCBs were re- underlined. He also said the Union
He noted there was an urgent need to strained by the NABARD from conduct-
merge these co-operative banks for ing normal banking operations like dis- Government has taken up the merger
sustainability, since they had already bursing credit and accepting deposits of 3 to 4 Public Sector Banks and this
been running in huge losses, while the merger is likely to benefit the
under Banking Regulations Act, 1949. economy. It is also important the office
lockdown had led to a further deterio-
In 2019, the UP government had raised bearers and the employees of the Ur-
ration of their financial condition.
concerns over the rising non-perform- ban Cooperative Banks make an in-
The panel's report has recommended ing assets (NPAs) and poor loan recov- depth study of the guidelines of RBI.
a composite action plan for the post- ery of the DCBs and had directed the Kanjibhai Bhalada, Chairman of
merger capital requirements of co-op- Registrar of Cooperative Societies to Varachha Cooperative Bank, Surat,
erative banks, deposit mobilisation, analyse the reason for the burgeoning said in the present time, it is necessary
staff restructuring etc. NPAs and take immediate measures, that the administrators and employees
Over the past decades, the district co- while fixing the accountability. At the of the Cooperative Banks and Institutes
operative banks (DCBs) with the at- end of September 2018, the coopera- remain continuously in close contact
tached state-wide network of primary tive banks in UP had a branch network and coordination through Cooperative
agriculture cooperative societies of 1,589 with deposits and advances of Training Classes and Webinar and keep
(PACS) are the cheapest vehicle for the Rs 16,750 crore and Rs 13,513 crore, themselves in touch with the latest situ-
disbursement and recovery of agricul- respectively. ation of the market.

22 | 2020 | AUGUST | BANKING FINANCE