Page 43 - Banking Finance June 2019

ARTICLE

is due to the difference in intial conditions at the start of done by encouraging the labour intensified industries
the growth process in terms of levels of human development and ensuring preferential credits and tax treatment.
and availability of infrastructure. Another intersting reason
4. Growth should keep prices of goods and services
is the increasing gap between rural and urban incomes.
consumed by the poor.
Estimates say that the gap is increasing and rural incomes
are now only about half the level of urban incomes on per
3. Conclusion
capital basis. The other drivers of inequality and poverty
It is beyond-doubt that the fate of Asian countries as
are found as:
expected depends on the right strategy of inclusive growth.
1. Neglect of Agriculture and Rural Development
So an inclusive growth strategy has to focus on sectors,
2. Failure in Employment generation
areas, factors of production and items of consumption that
3. Under Investment in Human Development can play a pervasive role in alleviating poverty. Therefore,
it is important to the policy makers to recognise the
4. Consequences of Liberalisation and Globalisation
particular groups' exluded or marginalised from the process
of growth. Special programmes or social safety nets may
2. Inclusive growth of Asia - Key Elements
need to be designed and put in place to target the
Based on the above analysis we can highlight the key elemets
empowerment of women, youth, and the landless, casual
of a strategy for achieving more inclusive grwoth in Asia as
workers in the formal sector, minorities and indigenous
follows:
people and the aged and disabled.
1. Grwoth should take place in sectors in which the poor
work (Agriculture Sector). References:
2. Groth should occur in backward and marginalized areas United Nations Development Programme, 2006, Trade
where the poor live. This is possible through the on Human Terms. Asia - Pasific Human Development
investments of public sector initially in physical and social Report, Colombo, Sri Lanka.
infrastructure. World Bank, 2007b, Globl Moniutering Report MDGs,
3. Growth should use the factors of production that the Washington DC, USA.
poor possess and enhance their capabilities. It can be World Bank, World Development Indicators data base.

RBI asks Urban cooperative banks to perform or perish
The Reserve Bank has asked urban cooperative banks, which have been facing a steady decline in their market share
for over a decade now to improve their management and governance practices so that customers repose their trust
in them and the banks can remain relevant. Since the fall of the Madhavpura Cooperative Bank scam of 2002, urban
cooperative banks (UCBs) have been witnessing a steady fall in their market share, which declined from 6.4 per cent
in FY02 to 3.3 per cent in FY17, according to Reserve Bank deputy governor NS Vishwanathan.
As of March 2017, there were 1,562 UCBs with deposits of Rs 4,43,468 crore and advances of Rs 2,61,225 crore,
accounting for about 3.6 per cent of deposits and 2.9 per cent of advances of the banking sector, he said. On an
aggregate basis, deposits grew 13.1 per cent and advances grew 6.6 per cent in FY17. Gross NPAs stood at little over
7 per cent and 91 per cent UCBS were reasonably capitalised with a core capital of over 9 per cent under the Basel
I norms, he said.
"While one may be tempted to attribute the decline in market share of UCBs to the emergence of other competing
alternatives within and outside the banking sector, there is no gainsaying the fact that UCBs need to regain and retain
the confidence of their depositors to remain in business," Vishwanathan told an event organized by the Gujarat Urban
Cooperative Banks Federation in Gandhinagar.
"The real barometer of public confidence is the market share of the sector, which has nearly halved between FY02
when it had stood at 6.4 per cent and FY17 when it had plunged to 3.3 per cent," Vishwanathan said.
He said as the regulator RBI has taken several measures to restore public confidence in UCBs and listed the signing of
the tripartite agreements with states and formation of a task-force in most states as the most impactful of them.

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