Urban Co-operative Banks

The urban co-operative banks can play an important role in bringing about financial inclusion of people in semi urban and urban areas.In view of their importance the RBI and government must play their promotional role well and effectively to ensure that these banks too grow expand and prosper.About four decades ago when these banks were brought under the Banking Regulation Act1949there were about 1250 urban co-operative banks with deposit and advances base of Rs 150 crores.In 1992 when the RBI on the advice of Marathe Committee opened up this sector the number of UCBs grew rapidly .Also the volume of business of these banks incrased.By March 2003 thre were over 1950 UCBs with deposits of Rs101546 croresand advances of Rs 54328 crores.Thereafter the RBI changrd its policy and focused on consolidation.Now the number of UCBs has come down.
A recent report by a working group of RBI has recommended the setting up of an umbrella organisation to provide capital support to UCBs.It is suggested that this umbrella organisation can provide payment and settlement services also to UCBs.
The report of RBI working group must be taken up for implementation early.It isbetter if these banks are allowed to access the capital market to mobilise equity.A separte co-operative stock exchange can be set up for listing the share of co-operative banksand for trading in these shares.Once this approach is in place these banks can on the basis of their track record of perforamance and value cration for stake-holders approach the public soliciting equity and moblise required capital.
The state governments must not interfere with the functioning of co-operatives.The audit of annual accounts of co-operatives must be got done by professional chartered accountants instead of by bureaucrts of stae governments co-operative departments.

New Kannada Article

A new Kannada article of Dr.K.K.Ammannaya has appeared in Udymadarshi of November 2009.This is on ''Serpadeya Pragatige Neeli Nakashe''