MUMBAI: RBI officials and executives of the urban co- operative banks in Maharashtra participated in a seminar on Supervisory Action Framework ( SAF) for UCBs organized in Mumbai recently by the Maharashtra Urban Coop Banksalt39 Federation ( MUCB
F) in consultation with the RBI. The RBI circular on SAF issued a month ago had created confusion among the cooperative banking sector.
Addressing the seminar, RBI, ED, S. Karuppasamy said that coop banks should put special efforts to bring down their NPA ( Non- Performing Assets) level which stands at 10 %. In 2002- 2003 gross NPA of coop banking sector was 22% and now it is 8 to 9%. This is a good improvement.
On the CRAR ( Capital to Risk ( Weighted) Assets Ratio) of banks, 90% of the banks have more than 9% CRAR and that 10% banks needed monitoring.
Agreeing to number of banks coming down, from more than 2200 UCBs in the country in 2000, to 1600 plus now, if the 10% banks do not improve, the number may come down further, he said.
After Madhavpura Bank issue which created crisis for the cooperative banking sector, Karuppasamy said, ” Whatever concessions we had taken out then, those benefits are being given back to the cooperative sector one by one.” Karuppaswamy cla- rified various issues raised by the bankers such as CD ratio of 70% applicable to UCBs and why only one criterion like CD ratio being used for initiating action against the UCBs. Member of Parliament and Federation director, Anandrao Adsul while appreciating the RBI for proactive approach said that he was surprised when two small Salary Earnersalt39 Banks have been penalized with Rs. 50.00 lakh to 2 crore for small violations. ” We look at the Regulator to discipline the UCBs slowly and properly and not by imposing heavy penalties. The time for imposition of strictly quantified penalties and supervisory actions leading to micro regulation are over and it is time to provide more and more growth oriented regulations to help spread of UCBs,” he said.
Federation chairman, Vidyadhar Anaskar, and directors Vilas Desai, Kailaschandra Agrawal, Eknath Thakur, ex MP and Chairman, Saraswat Bank while complimenting RBI, also raised various issues during the seminar. RBI CGM, A. Udgata also spoke. Federation chief executive and secretary Smt. Sayali Bhoir compered.
More than 300 delegates from all over Maharashtra attended the seminar.
