Reserve Bank of India?s deputy governor KC Chakrabarty said although co-operative banks have tremendous potential due to their reach and services, the country has not yet exploited it.
?If we look at the market share of deposits and advances of the scheduled commercial banks (SCBs), UCBs and RRBs, the situation is same. The SCBs share in the total bank deposits has been 92.1%, 93% and 93.3 % in the year 2006, 2007 and 2008 respectively as compared to UCBs 4.9%, 4.2% and 3.95%, respectively in the corresponding period, displaying a downward trend,? Chakrabarty said while delivering his address at the foundation and inauguration day of the ?Core Banking Solution Project? of AP Mahesh Cooperative Bank Ltd in Hyderabad.
He futher said uneven geographical dispersal of UCBs in few states such as Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu account for over 80% of urban co-operative banks presence and 75% of their total deposits. The use of technology has been an area of focus for the RBI. Another important aspect with regard to technology implementation for internal purpose in UCBs is the management information system.
Speaking on challenges before UCBs, Chakrabarty said banking cooperatives are at times organised and administered by those who lack both qualifications and experience necessary for the job which accounts for a large number of cooperatives? failures. Functioning in a highly technologically advanced banking environment in the country is in itself a challenge and an opportunity for the UCBs to upgrade to a computerised environment so as to focus on more business opportunities and render better customer service.
As of now, 1,307 directors have been given free of cost training by Reserve Bank of India, apart from 1,004 CEOs, 2,078 officials and 341 liquidators/administrators/auditors including chartered accountants.
Also, financial inclusion is critical for achieving inclusive growth in the country. We may achieve it through State-driven intervention by way of statutory enactments, through voluntary effort by the banking community by evolving various strategies to bring within the ambit of the banking sector the large strata of society, and more importantly; creating a demand by the people themselves to pull the banks, financial institutions and other service providers towards them to offer banking and financial services at a competitive and affordable rate.