To ensure that they survive and thrive, the top 50 urban co-operative banks (UCBs) should be allowed to be listed on stock exchanges, said a senior co-operative banker.

According to Mr Narendrakumar A. Baldota, Chairman, Greater Bombay Co-operative Bank, the central bank should allow the scheduled UCBs to float their shares at a premium to shore up their capital.

Listing on a stock exchange will create pressure to show financial performance and improve the image of UCBs, he added.

Currently, co-operative banks can bolster their capital only by issuing shares to members (at face value); plough back profits; and by issuing long-term subordinated deposits.

As on March-end 2011, there were 1,645 UCBs spread across the country. They had deposits and advances aggregating Rs 2,12,031 crore and Rs 1,36,341 crore, respectively.

Business growth

Greater Bank has set a target to grow its deposits and advances to Rs 1,600 crore (Rs 1,200 crore as on March 31) and Rs 1,000 crore (Rs 600 crore), respectively, by March 31, 2013.

The bank will step up its thrust on gold loans. Last year, the bank built its gold loan portfolio from scratch to Rs 90 crore. This year the plan is to grow this portfolio to Rs 200 crore.

“All the 22 branches of Greater Bank have a gold assaying machine. So, our branches can give loan against pledge of gold within half an hour. We charge 13 per cent interest on these loans,” said Mr Baldota.

In the next couple of years, the bank plans to increase its span of operations by opening branches in Gujarat, Madhya Pradesh and Karnataka.

>beena.parmar@thehindu.co.in

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