MUMBAI: The National Urban Cooperative Finance and Development Corporation (NUCFDC), the apex national body of urban cooperative banks (UCBs) is working with the RBI to become their self-regulatory organisation, expecting to double their profit and turnover over the next five years by adopting modern technology a senior official of the body has said.
Addressing an industry meeting to urge large UCBs to contribute to the NUCFDC so that it collects the Rs 300 crore that the RBI has set as mandatory equity capital, NUCFDC chairman Jyotindra Mehta said, so far some of the largest UCBs could collect only Rs 118 crore towards this capital and the apex body is in talk with the NCDC to raise Rs 200 crore in advance.
Once this happens, he expressed the confidence that the goal of becoming the SRO will be fructified.
“Competition is such that it has become a question of our survival. Unless we offer the customers what they want, we will not be able to survive for long. So the best way to survive and thus grow is to get ourselves under one umbrella and work together. If done so at the earliest, we can easily double not only our revenue but also our profit over the next five years,” Mehta said putting a number to either objective.
He also did not share what is the industry-level revenue and profit. There is no rule that the world can have only one Rabobank, which is the world’s largest cooperative with tens of hundreds of billions in assets. We can also work towards building our own Rabobank.
The Netherlands-based Rabobank is a multinational banking and financial services company comprising 89 local Dutch Rabobanks (cooperative banks), and many specialised international subsidiaries. Food and agribusiness constitute its primary international focus. Rabobank is the second-largest bank in the Netherlands in terms of total assets and is among the 50 largest financial institutions in the world. As of 2022, its total assets amount to 628 billion euros.
Ashish Kumar Bhutani, the secretary in the Union Ministry of cooperation, called upon the members to contribute to the collection of the RBI required core capital of Rs 300 crore.
He said that the amount from an individual UCB’s perspective is as low as it demands only 0.15 per cent of its deposits. Bhutani also said he would be meeting the RBI governor Sanjay Malhotra today.
The NUCFDC is requesting only the top 100 UCBs to chip in with funds for the would-be SRO, which has been in the making since 2016, but one way or another could not become till now, Mehta said adding, Rs 118 crore has come from 134 UCBs.
Bhutani said, the biggest problem facing the UCBs, which number between 1000 and close to 15000 cooperative banks is the lack of skilled manpower. The objective of NUCFDC is to bridge this gap by skilling them, by getting them on-board to a single core banking platform and thus helping them offer more products.