While the RBI will continue to support the urban cooperative banking sector in its growth ambitions, the banks need to be mindful of their responsibilities, particularly in view of the trust reposed on them by the depositors, said Governor Sanjay Malhotra.
The observation comes in the backdrop of Mumbai-based New India Cooperative Bank (NICB) getting into trouble last month after a ₹122 crore fraud was detected.
The RBI has superseded NICB’s board for 12 months with effect from February 14 due to certain material concerns emanating from poor governance standards observed in the bank. Further, it appointed an administrator to manage the affairs of the bank during this period.
At a meeting held on Wednesday with the Chairmen, Managing Director & Chief Executive Officers of select urban cooperative banks (UCBs) across all Tiers operating in different parts of the country, Malhotra stressed the importance of maintaining high standards of customer service to build and retain trust.
UCBs were also advised to ensure that they remain operationally resilient including against IT and cyber-related risks. The Governor acknowledged the important role of UCBs in serving the people at the grassroots level and deepening financial inclusion.
Representatives from industry bodies -- National Urban Cooperative Finance and Development Corporation Ltd and National Federation of Urban Co-operative Banks & Credit Societies Ltd, also participated in the meeting.