Cooperative banks in urban areas need to prioritise symmetrical development and use contemporary banking practises. Amit Shah, the Minister of Cooperation

On Thursday, the Minister of Cooperation, Amit Shah, issued a call to action to urban cooperative banks (UCBs), urging them to undergo major reforms in order to remain competitive. Some of these reforms include the recruitment of young people and the use of contemporary banking practises. He emphasised that UCBs should prioritise the construction of symmetrical structures.

Cooperation Minister Amit Shah encouraged urban cooperative banks (UCBs) on Thursday to implement important changes like recruiting young people and adopting contemporary banking procedures in order to stay competitive. Mr. Shah stated that urban cooperative banks (UCBs) need to focus on symmetric development.

According to what he said, the other reforms that UCBs need to implement in order to compete with nationalised and private banks are structural changes, strengthening of human resources, computerising accounting process, and hiring experts to handle surplus funds. These reforms are necessary in order to handle surplus funds. According to the minister, the UCBs should undertake these modifications in order to make themselves less important in the current climate. He also gave his assurance that cooperative banks will not be treated as “second-class citizens” by the government.

“There are 580 multi-state cooperative credit societies, 35 multi-state cooperative banks, 1,534 urban cooperative banks, and 22 state cooperatives. In addition, there are 54 scheduled urban cooperative banks. Although our presence is widespread, it is not uniform…. It is imperative that we put in the effort necessary to ensure the symmetrical growth of urban cooperative banks “Shah stated as he was giving a speech at this event. He stated that there is a need to establish at least one urban cooperative bank (UCB) in every town in the country and directed the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUS) to concentrate on the symmetric development of UCBs across India. This is due to the fact that cooperative banks are the only banks that lend to the lower strata of the society.

“Our continued participation in the race will be aided by symmetric expansion. Additionally, prosperous financial institutions need to step up and contribute to this “he stated. He went on to say that at this time, the part that urban cooperative banks play in the overall banking industry with regard to deposits and advance payments is almost nonexistent.

The Minister explained that the reason why there is growing economic activity in urban centres despite the fact that only forty percent of the country’s population lives in urban areas is because there is great potential for the creation of UCBs and cooperative credit organisations. UCBs are essential to the growth of the nation as a whole since they are the only banks that are able to provide financial assistance to less privileged members of society. “We have a responsibility to elevate up those in the bottom segment and include them in the economic growth of the nation. This is something that can be accomplished just through cooperatives “he remarked.

According to Shah, the role of UCBs is such that the loans provided by them have helped some people set up major businesses in the country. He also shared that he knew at least three such top businessmen who got their first Rs. 5 lakh loan from urban cooperative banks, and they are now major contributors to the country’s gross domestic product (GDP). In his summary of the most important changes, the Minister stated that UCBs cannot be content with their existing level of growth, which consists of a Rs. 500,000 deposit and a Rs. 3,000,000,000,000 advance payment.

“This may give the impression of being significant, but what percentage of the whole banking industry does it hold? The percentage of deposits held by urban cooperative banks is just 3.25 percent, and their portion of advance payments is only 2.69 percent. This has to be developed further “he stated. He stated that structural adjustments are necessary for the expansion of UCBs and that the younger generation that has previous banking expertise should be employed for improved operation of the banks. In addition to recruiting new people, the systems should be updated, the accounting should be computerised, and accounting alerts should be implemented. He stated that structural adjustments are necessary for the expansion of UCBs and that the younger generation that has previous banking expertise should be employed for improved operation of the banks.

According to him, it is vital to have transparency in the recruiting process and to hire specialists to handle extra cash. “In addition to having a spirit of cooperation, we need to adopt modern banking practises,” he stated. “Then and only then will we be able to stay in the competition.”

He went on to say that the Reserve Bank of India (RBI), on the other hand, need to loosen some of the limits while cooperative banks should work to increase their dependability. In addition, Shah brought attention to the fact that the government is in the process of constructing a data bank of cooperatives as well as setting up a separate university for cooperatives in addition to formulating a new policy.

In addition, the minister extended congratulations and best wishes to a number of urban cooperative banks that have successfully completed 100 years of business. At the ceremony were Cooperation Secretary Gyanesh Kumar, Minister of State for Cooperation B. L. Verma, and President of the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB) Jyotindra Mehta.

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