Technology, transparency key for urban cooperative banks to stay competitive: Shah

Union Minister Amit Shah on Saturday urged urban cooperative banks to embrace technology, ensure transparency and modernise customer services to remain competitive. Speaking at the inauguration of the new office of the National Urban Cooperative Finance and Development Corporation Limited (NUCFDC) in Mumbai, he said ensuring the prosperity of customers will help the banks achieve growth.

The Union Home and Cooperation Minister also urged all urban cooperative banks to join the NUCFDC, the apex umbrella organisation for the sector, within a year.

The NUCFDC serves as the umbrella organisation and self-regulatory body for Urban Cooperative Banks (UCBs) in India. Approved by the Reserve Bank of India (RBI) and headquartered in Mumbai, it provides capital, IT infrastructure and liquidity support to strengthen the cooperative banking sector.

“Our responsibility is to ensure that all banks become members of this organisation (NUCFDC), introduce technology, bring transparency, train staff, provide modern services to customers and sustain in the competition,” he said.

Shah said that of the nearly 1,400 urban cooperative banks in the country, around 690 have already become members of the organisation, and added that the remaining UCBs should also become part of it within a year. Making India prosperous requires fostering prosperity among its people, the minister said, adding that the capital market alone cannot fulfil this objective.

“We need to create a new system of self-employment simultaneously. Urban cooperative banks can do it and it is our responsibility,” he said.

Shah said the idea of “cooperation to prosperity” does not merely mean making banks financially stronger, but ensuring that customers become prosperous as well, which in turn would help banks grow.

Speaking about the RBI’s role, Shah said there was a need to bridge the perception gap between the central bank and urban cooperative banks.

“The Reserve Bank has a different outlook towards urban cooperative banks, and our urban banks also look at the RBI differently. We have to come out of it,” he said.

Drawing on his five-year experience as cooperation minister, Shah said the RBI had always extended proactive support whenever the cooperation sector approached it with confidence.

Shah said while protecting depositors’ money remains the RBI’s responsibility, urban cooperative banks must focus on improving governance, adopting technology and enhancing customer-centric services to strengthen the sector.