Dr. Bhagwat Kishanrao Karad, Minister of State in the Ministry of Finance, Government of India, was the chief guest at FCBA 2021. Excerpts from his keynote address:
Being rooted in local communities, the cooperative banks across the nation are more responsive to the needs of the local people. There is a substantial increase in the operations of cooperative banks and urban cooperative banks. There is a provision in RBI with effect from 1st March 1966 for protecting the interest of the depositor. The urban cooperative banks cater to the financial needs of more than 85 million depositors and 6.6 million borrowers across the nation and for the customers who are mainly from the low-income segments of the population. The urban cooperative banks play a significant role in reaching the last mile customers, despite their lower market share.
In 1967 there were 1106 urban cooperative banks with deposits and advances of Rs1.53-1.67 billion, these numbers are increased now up to Rs139.9 billion and the deposits and advances have increased by 86.6 billion. The urban cooperative witness considerable growth in the 1990s on the back of a supportive licensing environment.
The share of the urban cooperative banks in the banking sector has gradually declined and stands at 3%, as of March 2020. 40% of the entities in the banking sector are urban cooperative banks, however, their share in the banking sector deposits and advances was 3.24% and 2.69% respectively.
The urban cooperative banks are important because the nationalized banks and the private banks do have not their deep presence in villages and in the integral parts of the country. The network of urban cooperative banks, co-operative bank, and credit societies have deeper reach compared to PSU and private banks.
We are focusing on increasing financial intelligence and digital transactions. It is also important to increase financial literacy because this will increase the transparency in the currency. This will increase the taxable income and it will reduce the black money. The cooperative banks have done good work in different sectors, and I expect more good work in the coming years from them. After the pandemic the economy is growing, the expectations of the government from direct and indirect taxes are satisfactory. Last year’s income from the GST was 1.7 trillion. The budget of our country is around Rs 34.7 trillion, out of this, Rs 12 trillion comes from direct taxes, and similar amount from indirect taxes.
We have also taken the decision of disinvestment of Air India, the loss of Air India was 200 million rupees per day, with its recent stake the loss will be minimized. In the bank’s, there are more deposits and credit are less, so regarding it, we had a meeting with state banks and private banks in Mumbai, we are working on it to come out with a certain conclusion, which will be helpful to the citizens of the country.