RBI license on the anvil; Over 100 UCBs join NUCFDC, which will raise another Rs2 bn from Indian and global FIs:
The National Urban Cooperative Finance and Development Corporation (NUCFDC) on Monday announced that it will soon close its initial equity fund raise of Rs 1 billion and procure the RBI licence to start operations.
NUCFDC is India’s largest financial inclusion and digital transformation initiative for the banking industry. It aims to bring together and digitally transform 1500+ scheduled urban co-operative banks so that these UCBs are able to increase their financial inclusion outreach towards their customers. By bringing all the UCBs on a single technology stack, offering them best-in-class banking and non-banking products, setting up shared service centers for the sector, NUCFDC will bring in transparency, top-notch governance, and a younger clientele to the UCB sector. Post the licence, the NUCFDC will raise another Rs 2 billion from Indian and global financial institutions, and impact investors within December 2023. It aims to operationalise the first bank on its technology and services stack by July 2024.
Over 100 UCBs have already partnered with NUCFDC in this initiative. Saraswat Cooperative Bank, The Cosmos Cooperative Bank, The Kalupur Commercial Cooperative Bank, Janata Sahakari Bank, The Surat Peoples Cooperative Bank, Rajkot Nagarik Sahakari Bank, and The Mehsana Urban Cooperative Bank are among the large UCBs that have put their weight behind the umbrella organization very clearly demonstrating that the umbrella is of equal importance to the large and small banks.
Gautam Thakur, Chairman of Saraswat Bank said, “Saraswat Bank is happy to be a part of the UO (Umbrella Organisation) for UCBs which will serve as a common platform to provide the benefits of scale to smaller UCBs, through its network – with the added advantages of cross liquidity, capital support, stability and regulatory comfort. This is a step in the right direction, and will infuse the UCB sector with strength and vibrancy.”
CA Milind Kale, Chairman of the Cosmos Cooperative Bank, said, “The UO is of great significance for the UCBs to improve their operational and financial health, and to meet the industry standards. Establishing the UO is a long-term solution to make the UCB sector more resilient to the changing banking environment, and boost public confidence in UCBs. We look forward to the UO becoming an architect of the stable UCB sector in India. We expect UO to reinforce UCBs in true spirit and contribute in achieving ‘Sahakar Se Samriddhi’.”
Raja Debnath, Strategic Advisor to the board of NUCFDC and Managing Partner at Cogence Labs, said, “UCBs play a pivotal role in the Indian banking system and have been instrumental in being the first lender to millions of businesses when these businesses were not bankable by mainstream banks/NBFCs. NUCFDC will strengthen the UCB sector and equip them with the necessary toolkit so that they can continue to serve their 50m+ customers in their local areas that they know best. NUCFDC will transform 1500+ UCBs into a digital, secure and cohesive network of 11,000+ branches.”
Jyotindra Mehta, Chairman of NAFCUB and Chairman of NUCFDC, said, “The joining of these leading UCBs is a clear endorsement that even the larger banks are committed to the cooperative movement and cooperation within the sector. NUCFDC is a culmination of years of collaborative work by NAFCUB and RBI. NUCFDC will stand for transparent and secure banking services, and every UCB that adheres to these principles would be keen on joining India’s biggest initiative to deliver financial inclusion.”
Incorporated in 2020, NUCFDC was set up by the National Federation of Urban Co-operative Banks and Credit Societies (NAFCUB), the apex promotional body for UCBs and Credit Societies in India.
