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India’s co-operative banking sector is set to undergo a transformation with the concept of Umbrella Organisation (UO) of Urban Co-operative Banks (UCBs) seen as an answer to issues plaguing the sector.
The Reserve Bank of India (RBI) has allowed non-fund-based umbrella organisations at State levels, where respective State federations will take the lead. A working group, constituted by the RBI, felt it was necessary to facilitate the emergence of a UO to enhance public confidence in co-operative banking.
Gujarat is the first State in the country to have an UO for the UCB sector. The Centre for Banking Research Development & Excellence (CBRDE) was inaugurated in 2014, and has been conducting non-fund activities in the areas of training, capacity building and IT infrastructure and research.
Sahakar Setu 2018
To further strengthen the co-operative structure and spread information about the latest developments, strategic alliances, consolidation of sector and technology upgradation – along with the functioning of Umbrella Organisation – the Gujarat Urban Co-operative Banks Federation (GUBCF) is conducting a two-day conference and exhibition of co-operative banking sector under the name Sahakar Setu 2018, in Ahmedabad, from August 4-5.
On Saturday, Deputy Governor of RBI, N Vishwanathan, will engage with the UCBs in Gujarat on the concept of UOs and its impact on the UCBs.
Jyotindra Mehta, Chairman, GUBCF, said: “The UO will completely change the scenario for UCBs and provide them immense opportunities to grow. It will benefit the UCBs not only on the financial front, but also make technology and new innovations accessible to them.”
In 2016, a steering committee was constituted by NAFCUB, which had submitted its report to the RBI in August 2017.
As per the committee’s recommendations, a National Umbrella of UCBs will be formed as an NBFC and owned by UCBs.
It will provide a range of fund- and non-fund-based services.
“There should be participation of all the UCBs for the overall benefit of the sector. We want to bring the co-operative principle here as well,” said Mehta, adding that the expo will look to educate, guide and encourage members of UCBs.
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