Empowering Millions: NUCFDC Ushers in New Era for Urban Cooperative Banking in India
The long-awaited apex body for Urban Cooperative Banks (UCBs), the National Urban Cooperative Finance and Development Corporation Limited (NUCFDC), was finally launched on Saturday, marking a significant step towards strengthening and modernizing the sector.
Union Cooperation Minister Amit Shah, who inaugurated the NUCFDC, emphasized the importance of inclusivity in development. He stated that true progress extends beyond mere numbers and must be measured by the extent to which people actively participate in the nation’s growth.
Acknowledging the two-decade-long struggle to establish the NUCFDC, Shah highlighted the recommendations of various reports, including the Vishwanathan Committee, which had advocated for an umbrella organization for UCBs.
Vision for the Future: Expanding Reach and Enhancing Services
The minister outlined a compelling vision for the NUCFDC, urging its board to establish one urban cooperative bank in each unrepresented town/city within a specified timeframe. He further stressed the need for UCBs to upgrade their offerings to match the standards of public and private banks, including ATM facilities, credit/debit cards, clearing systems, adherence to SLR limits, and access to refinancing.
NUCFDC: A Catalyst for Transformation
The NUCFDC has been granted approval by the Reserve Bank of India (RBI) to function as both a non-banking finance company and a self-regulatory organization for the urban cooperative banking sector. This dual role empowers the NUCFDC to provide financial support and establish regulations for the sector, driving positive change.
Minister Shah underscored the critical role of the NUCFDC in:
- Ensuring Compliance: Guiding UCBs towards adherence to the Banking Regulations Act and fostering professionalism within the sector.
- Financial Stability: Achieving its target paid-up capital within a year and encouraging UCBs to become financially independent.
- Expansion and Inclusion: Facilitating the establishment of new UCBs in unrepresented locations, promoting financial inclusion and access to banking services for all.
A Look at the Landscape:
Currently, India boasts over 1,500 UCBs with 11,000 branches, collectively managing a deposit base of ₹5 lakh crore and a credit base of ₹3.50 lakh crore. While acknowledging the sector’s progress in reducing its net NPA rate to 2.10%, the minister emphasized the need for further improvement.
The launch of the NUCFDC marks a pivotal moment for the urban cooperative banking sector in India. With a clear vision for expansion, modernization, and financial stability, the NUCFDC is poised to empower millions by fostering financial inclusion and growth.
