On Saturday, Cooperation Minister Amit Shah officially launched the National Urban Cooperative Finance and Development Corporation (NUCFDC) and exhorted the umbrella organization and NAFCUB (National Federation of Urban Cooperative Banks and Credit Societies Ltd.) to aim to establish an urban cooperative bank in each town.
Shah emphasized that urban cooperative banks should enhance their services to include ATM facilities, credit/debit cards, clearing systems, compliance with the statutory liquidity ratio (SLR), and refinancing.
NUCFDC has obtained approval from the Reserve Bank of India (RBI) to function as a non-banking finance company and serve as a self-regulatory organization for the urban cooperative banking sector.
Expressing his satisfaction, Shah remarked, “After two decades, NUCFDC has come into existence. This is the need of the hour, and I am pleased that the RBI has granted approval for this initiative.” He recalled experiencing the absence of an umbrella organization during his tenure with the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB) during a crisis in Gujarat, emphasizing that some urban cooperative banks could have avoided losses if NUCFDC existed at that time.
Shah highlighted various discussions and reports, including those from the Vishwanathan Committee, stressing the importance of an umbrella organization for urban cooperative banks. He expressed confidence in the substantial growth of the urban cooperative banking sector with the establishment of NUCFDC.
NUCFDC’s broader role was underscored by Shah, who pointed out that despite the long-standing presence of urban cooperative banks in India, their growth has been limited, although they have the potential to play a crucial role in the country’s economic development. He emphasized that for these banks to thrive, they must upgrade their operations in accordance with RBI guidelines, with NUCFDC aiming to assist them in adhering to the Banking Regulations Act and infusing professionalism into their operations.
Shah likened NUCFDC to a ‘suraksha kavach’ (safety net) for small banks and urged urban cooperative banks to provide services such as ATM facilities, credit/debit cards, clearing systems, and adhere to SLR limits and refinancing, similar to commercial banks.
With over 1,500 urban cooperative banks boasting 11,000 branches and a cumulative deposit of Rs 5 lakh crore nationwide, Shah urged NUCFDC to achieve its target paid-up capital within a year without external dependencies. The National Cooperative Development Corporation (NCDC) has committed Rs 200 crore to support NUCFDC.
Shah presented certificates to major share contributors, including NCDC, Saraswat Cooperative Bank, and SVC Cooperative Bank Ltd.
NUCFDC to lead tech and efficiency transformation of UCBs!
During the event, NUCFDC Chairman Jyotindra Mehta expressed satisfaction that the long-awaited task of completing the urban cooperative banking sector’s unfinished agenda has finally been accomplished. Drawing parallels with successful models in the US and Europe, Mehta acknowledged that it took 20 years to establish the umbrella model in India.
The event was attended by Minister of State for Cooperation B L Verma, Minister of State for Finance Bhagwat Kishanrao Karad, Cooperation Secretary Ashish Bhutani, and NAFCUB Chairman Laxmi Das.
