Financial Daily from THE HINDU group of publications
Tuesday, Jun 28, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jun 28, 2005 |
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RBI & Other Central Banks Money & Banking - Co-operatives RBI, AP Govt sign pact to strengthen urban co-op banks — MoUs with other States on cards Our Bureau
BOOSTER FOR AP URBAN CO-OP BANKS: The Principal Secretary to the Andhra Pradesh Government, Mr G. Sudhir (left), and the Reserve Bank of India Executive Director, Mr A.V. Sardesai, signing an MoU at the Secretariat in Hyderabad on Monday, to strengthen 127 co-operative urban banks in the State. — Satish H.
Hyderabad , June 27 IN a trend-setting move, the Reserve Bank of India has entered into a memorandum of understanding (MoU) with the Andhra Pradesh Government on Monday for strengthening the State-based urban co-operative banks (UCBs). According to the MoU, the RBI and the State Government would constitute a State-level Task Force for Urban Cooperative Banks (TAFCUB) for reviewing their performance at periodical intervals and suggest measures for strengthening them. This move is expected to, in due course, cover other UCBs spread across the country. The apex bank would enter into similar MoUs with other State governments in due course, according to the RBI Executive Director, Mr A.V. Sardesai. At present, the UCBs are under dual control of RBI and State governments. The MoU envisages convergence on the approach and remedial actions required for facilitating the development of the cooperative urban banking sector. At present, the practice has been that of the Registrar of Cooperative Societies (RoC) implementing the decisions of RBI with regard to supercession of boards of UCBs and winding up of UCBs without any prior notice or consultation. In terms of this MoU, the apex bank would consult the RoC while taking decisions pertaining to the UCBs. Further, the RBI would not initiate any action unilaterally. It would be obligatory on the part of RoC to implement the decisions of RBI taking into account the recommendations of TAFCUB. The TAFCUB would consist of two representatives of State Government, two from the RBI and two from the National Federation of Cooperative Urban Banks and AP Cooperative Urban Banks Federation. Announcing the details of the MoU entered into with RBI, the AP Minister for Cooperation, Mr Kanna Laxminarayana, said a stage would come in the process where the unviable UCBs would be weeded out and good banks would be strengthened further. Earlier, the Deputy Governor of the RBI, Mr Leeladhar, had met the Chief Minister, Dr Y.S. Rajasekhara Reddy, and discussed the issues concerning the financial health and functioning of the UCBs in detail. The RBI has proposed for the introduction of long form audit report in the statutory audit, which is in vogue in all the commercial banks functioning in the country. The RBI would impart training to the employees and officers of the UCBs free of cost to improve their skill levels. Further, aimed at improving professionalism in the recruitment of Chief Executive Officers of UCBs, minimum educational qualifications and banking experience would also be specified. The RBI would help the UCBs in computerising their entire banking operations by bearing the cost of computerisation.
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