Centre's cooperative banks to come up in every city in nation

Sunday 10 March, 2024 | 1:08 AM

THIRUVANANTHAPURAM: The central government will come up with urban cooperative banks in every city of the country as a blow to cooperative banks in the states. This intrusive move in the cooperation sector is after Amit Shah took charge as the Union Minister for Cooperation.

The Centre is ignoring the opposition of Kerala, whose concern is that the Kerala Bank, formed by merging the district cooperative banks, will be threatened.

Urban cooperative banks are being set up in the states under the guise of National Urban Cooperative Finance and Development Corporation (NUCFDC), which was inaugurated in Delhi yesterday. Jyotindra Mehta is the Chairman of NUCFDC.

The Supreme Court has clarified that the cooperative sector should be under the control of the states. To overcome this, the second UPA government brought in a multi-state cooperative. Modi government's move is a continuation of that.

Urban banks will be opened as branches of NUCFDC. This agency is authorized by the Reserve Bank of India to act as a non-banking finance company and as a regulatory body for the urban cooperative banking sector.

Facilities including ATM

The Centre's urban cooperative banks will have all the facilities like ATM, credit / debit card, clearing system, SLR (Statutory Liquidity Ratio) limit etc. It will be a problem if the central banks compete with the cooperative banks of the state in terms of interest and loans. Central agencies are stepping up investigations into incidents like the Karuvannur scam and NABARD and the Reserve Bank are tightening regulations on state co-operative banks, with more independence coming to central urban banks. At present, there are more than 1,500 urban cooperative banks across the country with 11,000 branches and 5 lakh crore deposits.