Bengaluru : Coming down hard on cooperative banks, RBI Deputy Governor R Gandhi today said their share is below 5 per cent despite large number, as they have not kept pace with technological advances and lack professionalism. Gandhi feels cooperative segment’s true potential has not been fully achieved.

“….even with such a large number of cooperative banks, considering the total asset size, their share of the Indian banking sector is not more than 5 per cent, that means the true potential has not been fully achieved,” Gandhi said.

He was speaking at a silver jubilee function of National Institute for Rural Banking here. Gandhi cited reluctance in adapting new technology, decline in cooperative character, lack of professionalism and lack of corporate governance in cooperative institutions as the major factors behind unsatisfactory growth in the sector. “A view needs to be taken whether a fresh round of cooperative bank licensing is due, as well as they can put in place a definite migration process for well managed cooperative banks to make their transition,” Gandhi said. “…I’m heading that committee…we are looking into it,” he added. Speaking to reporters on the sidelines of the event, Gandhi declined to comment on rate cuts and inflation.

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