The recent developments, including the failure of Punjab & Maharashtra Cooperative Bank (PMC Bank), has dented public confidence in banking channels especially in co-operative banks.
The case of PMC Bank has not been an isolated one and urban cooperative banks have had various financial discrepancies over the years. On the flip side, UCBs have played a significant role in bringing banking benefits to un-banked and under banked masses in semi urban and rural areas.
With the government aiming for a $5 trillion economy by 2024-25, there is a need to tighten the loose ends of the banking sector including UCBs. Here is the high-level economic and regulatory scenario and the future business roadmap for cooperative banks in the country:
Financial vulnerability and management structure of UCBs
Unlike regular banks, urban cooperative banks are registered as cooperative societies. They are regulated by the Reserve Bank of India only from a financial perspective. This means management supervision of such banks is done by state and central governments. Owing to this dual control, cooperative banks have often been devoid of effective regulation. Unlike traditional banks, UCBs cannot tap the financial markets to raise fresh capital making is difficult for these banks to sustain growth with rising defaults and competition.
Why cooperative banks remain significant
This story is from the Achievements of Cooperative Banks 2019-2020 edition of Banking Frontiers.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the Achievements of Cooperative Banks 2019-2020 edition of Banking Frontiers.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Kamdhenu & Sammrudhi loans top rural customers
Unnayan Bharat Finance Corporation (UBFC) Director & Co-Founder Avneesh Trivedi shares the company's attempts to enhance the rural lending environment & deliver better services to its consumers:
It's going to be a 'world' of CBDCs
Practically, every central bank in the world is testing and readying a CBDC system:
Training for behavioral & social skills is key
3 CHROs from the top BFSI companies in India open up about their training and motivation programs aimed at enhancing employee effectiveness. The story is divided into 4 parts: (i) functional and behavioral training, (ii) manager to leadership training, (iii) learning-based training, (iv) motivational programs:
THE AI COMPASS
Artificial Intelligence has risen to be the hottest topic of discussion today. It is expected to impact everyone, and the impact could exceed that of war, global warming, supply chain disruptions, geopolitics, and much more.
To mentor & coach emerging leaders
Manish Shah, MD & CEO of Godrej Capital, outlines his focus areas today and in the future:
Innovation will unlock India's Mission 'Atmanirbhar’
Sunita Handa is Chairman, Toyota FSIN and Principal Advisor & TLAB Chairman, Protectt.ai Labs. She shares her current activities and her deep insights on innovaiton in an interaction with Manoj Agrawal:
Algorithm is the Boss
Irem Sayeed, Chief Credit Officer at U GRO Capital, dwells into business focus and modernization at the lender:
Fintech and Neobank under the same Umbrella
It was started in 1902 to build what came to be called Israel:
Bajaj Allianz Revolutionizes Employee's HR and IT Experience with WhatsApp, MS Teams, Al and Automation
A productivity booster shot at BALIC:
Small Beginning for a Big Opportunity
AMU Leasing's focus on serving the underserved market of individuals and fleets looking for financing for electric 3-wheelers and 2-wheelers: