The National Federation of Urban Cooperative Banks & Credit Societies [NAFCUB] has opposed Reserve Bank of India’s proposal to convert Urban Cooperative Banks [UCBs] into commercial entities. In August, a high power Committee headed by RBI Deputy Governor R. Gandhi had recommended that multi-state UCBs having business of more than Rs 20,0000 crore could be converted into commercial banks.
A Press Release from the Federation says: “NAFCUB sees it as ‘policing act’ coming from the RBI and is disappointed by the fact that these recommendations contradict the 97th Constitutional Amendment enshrining right to form a cooperative movement to private hands.”
The Federation elucidates that though UCBs may be small when compared to commercial banks, yet, they are large in numbers. They were set up not for doing any profitable business, but to improve the standard of living of the poor through inclusive growth. The RBI recommendation would amount to handing over the 100-years old cooperative movement to private hands. Both its Board and General body have passed a resolution rejecting this recommendation and decided that every UCB will pass a resolution against the report and submit it to RBI, so that the said recommendations would not be implemented.
